Exclusive: Vodafone DID pay UK corporation tax in 2013/14


Files lodged at Companies House show the operator paid £4.7 million in corporation tax through its MVNO Talkmobile and a total of £12.4 million in its last three financial years

Vodafone did pay UK corporation tax during the 2013/14 financial year through its MVNO Talkmobile.

A £4.7 million corporation tax payment was made on the £20.4 million profit Talkmobile made for the year-ending March 31 2014, according to documents lodged at Companies House recently.

Revenues at the MVNO increased by 37 per cent over the year to £118.4 million.

Vodafone is the ultimate owner of the MVNO after it bought the company from Carphone Warehouse in October 2011.

The operator has faced widespread criticism for not paying any corporation tax in its last three financial years but it also made payments through Talkmobile of £5.2 million in 2012/13 and £2.5 million in 2011/12.

In its most recent annual results for the year-ending March 31 2014 it paid no corporation tax on an operating profit of £187 million and revenues of £6.4 billion.

It has always defended its stance saying it is allowed to offset the cost of its capital expenditure against its profits. It spent £1.8 billion on its UK network in 2013/14.

“This is an area where there has been a lot of misunderstanding,” Vodafone chief financial officer Nick Read said at the time.

“Governments around the world, and the UK is no exception, want to encourage investment in infrastructure to encourage investment and what they allow is capital allowances as a deduction against your profits ring.

“They also understand that you have to borrow to be able to invest for the long term, so they allow interest income off your profits.

“The UK market is highly, highly competitive so we have a very small profit that comes out of the UK business and it’s dwarfed by the first two items in terms of deductions.”