Protesters target Vodafone “tax dodgers”
Article published: Monday, November 1st 2010
Protesters claiming that Vodafone owes the public £6bn in unpaid taxes shut down the phone company’s store in Manchester City Centre on Saturday as part of a nationwide day of action, during which shops were also closed in central London, Brighton, Bristol, Edinburgh, Glasgow, Hastings, Liverpool, Oxford and York.
The protest, called by UK Uncut after London’s Oxford Road store was shut down last Wednesday, began at around 12:45 when a large crowd approached the Market Street branch, which immediately shut its doors. Protestors stayed for several hours, handing out fliers to the public and holding a banner within which the Vodafone logo had been changed to read “tax dodgers”.
The £6bn figure is particularly controversial since it is almost equal to the £7bn being cut from the national welfare budget. Said campaigner Andi Sidwell: “How can we take the government seriously when they let off tax dodgers? Public sector cuts are not the only way out, there are better ways to save money.”
Another of the protesters, Deborah Lee, said: “The cuts are not fair; we’re not all in this together, and there are alternatives. Why not start by collecting the tens of billions owed in taxes by wealthy corporations? The government is writing off the taxes from big business while treating normal people on benefits like criminals.”
Estimates for the total yearly amount of tax avoided by individuals is £13bn and for corporations £12bn.
However Vodafone denied the allegations, saying in a statement on their website: “We pay our taxes in the UK and all of the other countries in which we operate.
“Reports suggesting that we have an outstanding tax bill for £6bn are incorrect, as this was never the case.”
A spokesman for HM Revenue and Customs (HMRC) said: “We can’t comment on the details of the settlement but we can confirm that it was reached by HMRC following a rigorous examination of the facts. It was agreed that Vodafone’s liability was £1.25bn and at no point was the liability greater than that.
“There is no question of Vodafone having a tax liability of £6bn. That number is an urban myth.”
However campaigners draw the £6bn figure from an article that appeared in Private Eye in September, which outlines how HMRC originally pursued Vodafone after their purchase of German company Mannesmann in 2000. Private Eye alleges that the deal was made through Vodafone subsidiary Vodafone Investments Luxembourg (VIL), allowing Vodafone to argue that European law ensured they could establish anywhere in the EU without having to pay a tax bill in the UK.
Although HRMC’s pursuit of the company was buoyed when last year the court of appeal ruled that the British anti-tax avoidance laws could operate alongside European law, Vodafone ended up paying the smaller £1.25bn amount after Permanent Secretary for Tax, Dave Hartnett, assigned the case to a new group of lawyers that had a “less black and white interpretation of the law”. This group quickly reached a deal with John Connors, Vodafone’s head of tax, who was until 2007 a senior official at HMRC and had worked closely with Hartnett.
A few days after the agreement was made, Chancellor George Osborne arrived in India with a trade delegation that included Vodafone. Last week Indian authorities demanded that Vodafone pay £1.6bn in back-taxes following their purchase of a stake in an Indian mobile phone operator in 2007.
Future protests will be announced on the UK Uncut website.
Tom Fox and Andy Lockhart
More: Manchester, News
Comments
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What a pointless protest. The usual rentamob people would have been better off outside the tax office. The taxman is happy with the tax paid by Vodafone.
Comment by simon on November 1, 2010 at 7:32 pm -
Quoted from Private Eye:
“The bill for all other taxpayers in lost tax is likely to be at least £6bn. Resentment within the HMRC ranks is high and one former official familiar with the case described it as an “unbelievable cave-in”. But there is no means for the deal to be audited: the National Audit Office refuses to look at specific cases.”
Looks like the taxman is pissed of as well.
Comment by tom on November 1, 2010 at 7:37 pm -
[…] At the same time there are other cuts-related campaigns in the city such as last year’s UKUncut demonstrations against corporate tax evasion and the fight to restore funding to South Manchester Law […]
Pingback by Unions and communities to mobilise against cuts — MULE on January 6, 2011 at 11:48 am -
[…] and creative ways. The direct action network UKUncut, which came to media attention last year with occupations of corporate tax evaders including Vodafone and Boots in cities across the country, have identified a list of tax dodgers […]
Pingback by Manchester prepares to march on London — MULE on March 23, 2011 at 10:25 pm
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