Vodafone avoided paying UK corporation tax in 2011: report
11 Jun 2012
Global telecom giant Vodafone Group Plc has paid zero tax in Britain last year, igniting a fresh controversy over its UK tax bill, the Sunday Times reported yesterday.
The report said that the company earns several million pounds from its 19 million customers in the country, but shared no tax with the Her Majesty's Revenue & Customs (HMRC) last year.
Vodafone's earnings before interest and taxes in the UK were up to £1.3 billion in 2011 from £1.2 billion in the previous year, when it paid £140 million to the country's exchequer.
Vodafone said that it is due to tax reliefs in the UK for capital investment, as is the case with several other countries.
The company said its corporation tax liabilities were offset by its capital expenditure for network improvement. The investments went up to £575 million in 2011 from £516 million in the previous year. Vodafone has paid close to £6 billion for its spectrum licence in 2000.
The mobile operator said that it has paid about £700 million in pay roll and other taxes in the UK in 2011. Globally, the company paid £14 billion to the public including pay roll, sales tax and spectrum fees, and its global corporation tax rose by £300 million to £2.3 billion last year.
The UK operations account for only 4 per cent of the company's profits, according to the company.
