Vodafone defends UK tax payments amidst growing public scrutiny

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Latest update on tax payments show operator paid £320 million in direct taxes in FY2015, while staff base has grown to 16,681

Vodafone has defended its policy of paying no corporation tax in the UK claiming it is one of the largest private infrastructure investors in the country.

The tax policies of large corporations has come under increased scrutiny recently following Google’s £130 million corporation deal struck with the taxman last month.

In its latest report on taxation policy across the globe, Vodafone defended its UK tax policy, which has come under fire in previous years when it was revealed Vodafone paid no corporation tax.

In a section about why it doesn’t pay corporation tax in the UK, the operator said: “Vodafone makes huge investments in the UK. We spent over £1.3 billion in 2014–15 building and upgrading the networks relied upon by millions of UK consumers and businesses. In addition, since 2000 we have paid the UK Government more than £7 billion for our UK 3G and 4G radio spectrum licences.

“Corporation tax is charged on profits, not revenues. The UK is an expensive and highly competitive country in which to do business and has one of the least-profitable mobile markets anywhere in the world. Many people confuse revenues with profits. However, our UK profit is a small fraction of our gross UK revenues; below £50 million in 2014–15, which is significantly less than the interest costs on our UK debt and less than five per cent of our annual UK capital investment programme.”

Overall, Vodafone paid £320 million in direct taxes in the UK in 2014/15, compared with £350 million the previous financial year. It also saw its number of employees in the UK grow from 12,979 to 16,681 last year.

The operator saw its global tax bill fall by 36 per cent to £9.3 billion. £2.3 billion of this was direct taxes, while £1.3 billion was from other non-direct taxes and levies. The remaining £5.7 billion was indirect contributions made to national governments.

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