So here\’s the headline:
Vodafone paid no corporation tax in Britain last year
Generous tax breaks mean second largest mobile phone company able to reduce bill to zero for second consecutive year
Blimey. What did they do then?
In common with many other UK businesses, Vodafone\’s British operating company is able to shelter much of its profit from tax legally. The firm made a £294m operating profit in Britain last year, but was able to transform that into a loss.
In common with other mobile phone networks, Vodafone claimed back part of the money it has spent on its network, building masts and laying cables. It also claimed back part of the cash it paid the government to buy the airwaves that carry mobile traffic, as well as interest charges on the money it borrowed to pay for them.
So it deducted from its gross operating profits the further costs of doing business. After which is made no taxable profit.
Seriously, this is now being described as tax dodging?
There\’s another way of putting this.
It also claimed back part of the cash it paid the government to buy the airwaves that carry mobile traffic
Yup, the government got the tax money a decade and more back in the telecoms auction. The reason Vodafone isn\’t paying tax now on UK activities is because it\’s already paid it.