are they going to pay GCT then? ;-)
Maybe they hid it in my coat......
Vodafone's acquisition of Hutchison Essar is not liable to Indian taxation, a court has ruled, as the 2007 transaction took place outside the sub-continent - despite Essar being based there. Vodafone and Hutchison successfully argued at the Indian Supreme Court that as neither company is headquartered in India they don't have …
The people avoiding the GCT here are the original owners - so the main beneficiaries will be the Mumbai based Ruias brothers who control Essar and the Hong Kong based Li Ka-Shing who controls Hutchinson Whampoa. Your other points are perfectly valid, though...
In what sense is any of that your money? Or for that matter, in what sense was it stolen? This was a matter of a disputed tax bill, and as the supreme court of a country has decided that no such liability was due, then it's rather difficult to make such a case, let alone that money was stolen. But then maybe you don't care too much for the rule of law.
I think MORALLY (which of course has no basis in law) they should pay money on the extraordinary profits they make.
But this is the company which charged their UK Employee's UK Tax and then kept the money. Which they claimed was legal but was it moral when 1000's of people in the UK are losing their job children are losing access to library's and grannies are losing their meals on wheels.
All people want in companies which make money in the UK to pay their fair share. This obviously isn't happening and it has to stop!
One cannot help wondering whether he conversation went something like this...
VF: you know all this investment we have in your country?
Indian Govt: yes?
VF: well China's offering us a pretty nice deal. We'd like to stay but...
Indian Govt: yes?
VF: well, if we have to pay this horribly big tax bill we might have to go to China instead
Indian Govt: Oh!
VF: think of all the call-centre and IT staff out on their arses....
Indian Govt: tax bill? What tax bill?
Why is there so much Vodafone hate about?? Both the UK and Indian supreme courts ruled that Vodafone doesn't owe outstanding tax. The law has spoken!
Vodafone happen to be a massive British company that employs about 10K people here and pays a lot in UK taxes. That's good for our country!
I suspect half the wingers boycott British Vodafone and go get contacts with Franco/German Everything Everywhere or Spanish O2 - siphoning profits out of the UK and into foreign lands. But that's fine because Vodafone supposedly stole tax and every other corporation around the world doesn't employ the exact same legal tax evasion methods...
Typical British foot, point, shoot.. as always!
"maybe because everything you read about them reeks of dodgy dealings and secret handshakes?"
When corporations get to the size of Voda et al, I'd imagine that's par for the course...
Anon 'cos I just bought a iPhone 4S from Voda on a special offer, and don't want it to turn up knackered! ;-)
Vodafone got out of paying UK taxes by taking the head of the HMRC out to lunch. They might have got away with it in the courts, but I bet your bottom dollar I wouldn't get away with it if I didnt want to pay my taxes.
As it stands Vodafone DOESN't pay the taxes,it's staff do. Personally since France and Germany have tighter tax regulations, I dropped my vodafone contract which I could run up hundreds per month of calls on and am paying for the more expensive Orange contract because atleast I know they will be paying tax in france and germany where the old boys network doesn't work so well and it's harder for firms to avoid their taxes.
I would rather have my hard earned money go to French and German schools and healthcare via taxation that British institutional investors who shovel all their crap through the Caymen Islands or Jersey.
Mine's the Beer for Dave Harknett
The Indian Supreme court has ruled in their favour but in the UK it was a cosy deal arranged over dinner between Dave Hartnet, head of HRMC, and his former colleague John Connors, an ex-senior HMRC staffer who had moved Vodafone.
In fact the UK Court of Appeal found against Vodafone by ruling that British regulations ruling out the use of tax havens for avoidance schemes did not conflict with European law.
Dave Hartnet then went against against the advice of his own lawyers, who he told the FT were "too black and white about the law".
Erm .. Vodafone are not unlikely to have to pay the tax they've been let off in Britain. No court has yet decided. Any previous court cases will be small change by comparison.
As for the Indian decision, like the HMRC one, isn't it even vaguely possible that it owes as much to pragmatism as to law. It is, after all, something of a reversal from the lower courts. Did they know nothing of law? I think probably they knew it well.
The reason for pointing out the tax dodging nature of Vodaphone relates to well-documented events (in Private Eye) relating to personal meetings between Dave Hartnett, HMRC Chief and Vodaphone. This led to Dave Hartnett personally letting Vodaphone off of £4.8 billion according to the Guardian. According to the commons select committee he overstepped his bounds, failed to seek proper legal advice and took a personal decision that cost this country £4.8 billion.
So Vodaphone employs a lot of people? So what - they still have to pay their way. This privileged tax burden makes it harder for companies that DO pay their tax. A LOT of companies employ a lot of people and they have to pay tax or get hounded by HMRC.
Little people don't get to wine and dine the taxman. Actually, not the taxman, the head of HMRC, who then personally reduces your bill. How much did those meetings cost? 10K? A pretty good return on investment, eh?
Its a lot easier to run a successful business if you don't pay tax.
Wow some people really are naive and just sound like a broken record spitting out the same old tripe!
Do you really think that Vodafone plc completely avoids paying all tax in the UK?
Do you believe that one man's decision to "let them off" would be vindicated by the Chancellor, the Treasury, and the Supreme Court, if they actually legally owed £4/5 billion?
Do you believe our political and legal system is that corrupt, that buying a few dinners will revoke the need to pay tax?
A company that employs thousands, pays £Bs annually in tax, has contributed £Bs in buying telecoms licenses, and is one the few remaining globally successful FTSE100 companies - is in actual fact "a damage" because they came to a legal agreement to pay £1.2B in tax on OVERSEAS earnings instead of a phantom £6B. Generally, we should be happy we got over a billion as normally companies don't pay tax on overseas earnings!
But here come the downvotes from bandwagon numpties who fail to understand the big picture!
(and please get the company's name right - it really does degrade your argument when you don't even really know who you're talking about!)
"Do you really think that Vodafone plc completely avoids paying all tax in the UK?"
Yes, because they happily admitted to doing it for years - putting aside the tax they legally owed in this country in offshore accounts so that they could "work" it until it was asked for. Off the top of my head, they did this for something like six years before HMRC got up the courage to approach them about it.
Where the tax was "earned" is irrelevant (most of it was on-shore anyway); the laws on this country required them to pay that tax.
"Do you believe that one man's decision to "let them off" would be vindicated by the Chancellor, the Treasury, and the Supreme Court, if they actually legally owed £4/5 billion?"
Again, yes, because no one looked in to the deal at the time. Dave Hartnett was forced to declare how cosy the deal had got /after it had all been signed off/ (it was a little more than a few lunches).
His job was to chase and close large tax avoidance schemes (to rhyme with scams) such as what Voda were doing. True, there's the possibility that the contract will be retrospectively annulled, but I won't hold my breath.
Voda ended up agreeing to pay less than a quarter of what they legally owed (and knew they did), but DH let them off the rest and considered it a "good deal" (his words).
They haven't covered it in a while, but the Private Eye did some very in-depth coverage in to what Vodafone owed, why, and how they got away with it.
Not that they are the exception, by any margin.
The government is waging a massive campaign against the some of the poorest and most vulnerable people in this country. The old, the sick and the handicapped are categorised as either frauds or just too expensive to support. Increasingly hate filled measures are proposed for smaller and smaller gain yet hear a huge amount of money is 'given away' to people who are neither poor nor vulnerable but rich, arrogant and greedy by someone who is also rich, arrogant and greedy.
And their customer support is crap.
Vodafone do pay tax. Just like any other person and company they are entitled to use any legal means possible to minimise their tax.
To all those moaning about Vodafone not paying tax, do you pay anyone cash in hand? Do you use dividends over salary if you are self employed? Do you truthfully tell HMRC about all your savings interest, even if it's only a few pounds a year? Do you buy stuff through expenses so that the company pays the VAT and you don't? Yes? Then you are in the same boat as Vodafone, just the amounts are different.
To fully understand the Vodafone situations please read the blog of Tim Worstall - http://timworstall.com/
Nope, don't do any of those except the bit about the savings interest - which is of course being kept artificially low by the BoE as part of their attempt to devalue the pound sufficiently to save the banks and other financial institutions who desperately need to build their liquidity to combat the dramatic fall in the value of their property and other assets which, one day, they'll have to recognise on their balance sheets (which don't need to reflect reality by specific dispensation of the accounting standards bodies, so lucky there is no conflict of interest there); maybe when the base rate goes back to some economically sane positive value.
But, back to the rant-du-jour. We don't know whether Voda have minimised or avoided a large tax bill because it has not been tested in court. The reason it has not been tested in court is the intervention of the boss of the HMRC who is neither a tax nor a legal expert but who overruled people who were both. It may be that Voda would have won the court case or, more likely, they may have come to a more realistic deal beforehand, or it may even be that they managed to convince said boss over a very convivial lunch that HMRC was onto a legal hiding and that he would take the flak. Remembering of course that the HMRC boss seems to have form in his individual dealings with the tax affairs of large corporates.
To me it looks like Voda organised the original deal in a particular way to avoid paying tax, and they messed up somehow - maybe the HMRC unexpectedly checked the small print. Accounting rules then required them to make some financial provision in case they did end up paying the bill, but their main effort went into obfuscation and delay until they found a weak spot they could exploit. I imagine their response team will have received generous recognition for their success; I wonder if it was in a form that is taxable in the UK.
I don't find this in any way admirable.
What all these "well meaning people" don't understand is that Vodafone is one of the largest UK companies outside petrochemicals.
If you have a pension, it's likely that much of the money you've paid in is invested in Vodafone (or not if you are a public servant because the rest of us paid it in for you).
I for one would like to think of my retirement being dependant upon me not minding eating cat food on crackers.
Well done Vodafone, I look forward to seeing my pension grow.
What a quaint idea of the stock market.
The idea that a company's share price has any connection with its value is so 1980s (maybe even 1970s). When shares are traded between computers following some very sophisticated [*] algorithms and financial marketeers make their profit from trading volume rather than margins, then the old idea that shares are a good long term investments starts to look a tad dated.
[*] thats 'sophisticated' as in error prone & poorly understood
Simple truth is that the value of a pension in 2 years time is very difficult to guess, let alone in 5 or 10 years. Add in an extended period of the devaluation & 'stagflation' eroding the actual value and its not looking too good for most of us.
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