I hadn\’t realised this but it does make perfect sense:
Vodafone has been heavily criticised for its tax arrangements after it paid no UK corporation tax last year, despite being headquartered in Newbury, Berks. It paid £700m in payroll and other taxes, but wrote its corporation tax contribution off against capital expenditure of £575m, as well part of the £5.96bn it paid for spectrum in 2000.
That £6 billion is obviously a business expense, it buys spectrum for 15 years and thus will, one assumes, be written off over 15 years.
That\’s a £400 million a year write off against UK operating profits, no? Add that to the £575 million (I think) capital investment in the UK network last year and one can see how there\’s no tax bill on £402 million of adjusted profits.
Which leads me to ponder: who has Vodafone pissed off to be getting this much attention? There\’s definitely something of a campaign against the company. A series of allegations of tax dodging none of which have actually come to anything once all the details are known.
Some of these allegations (all of them?) can be traced back to Richard Brooks at Private Eye. So what happened? Did someone at Vodafone screw his pooch? Nick his mistress? Not respect his authoritah when he was a tax inspector?
I can definitely hear the sound of knives being sharpened: but why?