VodafoneFor the last ten years Vodafone have been fighting tooth and nail to avoid paying the UK government around £6bn in tax. Court case followed court case, and eventually HM Revenue and Customs won a decisive victory. Vodafone were on the ropes and all that was needed was a couple more government knocks to finally make the communication giant pay up. But instead of forcing through the deal, the exchequer, run by George Osborne, let Vodafone off. It was one of the most shameless, blatant and costly examples of corporate-government cronyism in years. But at a time when the government are insisting upon massive cuts in public spending, the deal is particularly hard to swallow.
Vodafone are relatively open about their motivations. “The maximisation of shareholder value,” their website declares, “will generally involve the minimisation of taxation.” In India too, Vodafone have sought to avoid a further £1.6bn tax bill. However, the Indian authorities, unlike the British, have successfully pursued Vodafone for the money, forcing them to pay up.
Typically, companies rely on the indifference of the media and the technical difficulty of the issue to avoid public anger at tax dodging activities. But in October, anger at the Vodafone deal spilled onto the streets. In dozens of cities all across the country people came out to protest, forcing around 10% of Vodafone stores to shut down. Vodafone scrambled to denounce the accusations as an ‘urban myth’ but this denial fell flat quickly as commentators pointed out that urban myths don’t tend to originate from impeccably researched magazine exposes conducted by tax experts or from high level sources within the HMRC itself.