Auditor’s report says HMRC was right to take £1.25 billion settlement as pursuing the £6 billion it claimed Vodafone owed through the courts could have ended in defeat for the tax man
Vodafone has welcomed a report from the National Audit Office (NAO) which says that the deal made by Her Majesty’s Revenue and Customs (HMRC) to take a £1.25 billion settlement from the operator during a dispute over a more than £6 billion tax bill was “good value for money”.
In a report on five settlements reached by HMRC, the audit office said HMRC was “right” to settle because it could have lost legal action against the operator.
HMRC has previously been criticised for the deal, amid claims that the body’s chief executive interfered in the nine-year dispute.
The NAO did recommend separating responsibility for negotiating and authorising settlements at HMRC.
Vodafone Group chief financial officer Andy Halford said: “For more than a year, Vodafone has been falsely accused of improper conduct. As we have consistently stated, those attacks were unwarranted and unjust.
“We acted with the utmost propriety throughout the HMRC settlement process, and the National Audit Office has now concluded that the outcome was good for the UK taxpayer.
“We welcome this vindication. Vodafone has always been a responsible company with a strong commitment to managing our affairs properly and diligently within the law and with full disclosure to all relevant tax authorities.”
“Vodafone is a long-standing and significant contributor to the UK as a whole, not least in our role as the biggest dividend payer in the UK. We returned £6.7 billion in cash to our shareholders this year, who include virtually every major investment fund relied upon by millions of UK pensioners and savers.”
Vodafone has recently become involved in another furore over its tax payments after it was revealed that the operator after it was revealed the company paid no corporation tax last year.
Vodafone has said its tax bill had been offset by capital investment in the UK.