Vodafone not paying taxes: Well That's alright then

[cjp]

"You may have seen the recent media headlines alleging Vodafone doesn't pay its fair share of taxes in this country. Those headlines are dead wrong," said Kleisterlee. "It is also untrue that we are exploiting loopholes to minimise our UK corporation tax."

Last year Vodafone paid £3bn in corporation tax to other governments but its UK bill was zero thanks to a series of tax breaks.

Gerard Kleisterlee, a Dutch National born 1946 = Vodaphone Chairman

Yet I pay my taxes to help run this country where Vodaphone are employing people to make Vodaphone wealthier (by getting our taxed income).

Hurrah for Government and Capitalism

 

[Xenophon PCDGS]

They can flaunt their tax avoidance and tax evasion for just so long, then matters will surely be brought to a head.

 

[Eagle]

What's the difference between exploiting esoteric loopholes to legally reduce the amount of taxes one pays, and exploiting esoteric loopholes to legally reduce the amount of rail fare one pays?

 

[bnm]

The only difference is scale.

 

[MidnightFlyer]

Hurrah for ... Capitalism

Indeed. Not necessarily perfect but just imagine where we'd be now if it had never existed, or, worse still (IMO) we'd adopted communism.

 

[Xenophon PCDGS]

Indeed. Not necessarily perfect but just imagine where we'd be now if it had never existed, or, worse still (IMO) we'd adopted communism.

Now then, Bob Crow would be upset if his cherished espousement was only a figment of his imagination these days....

 

[D365]

Now then, Bob Crow would be upset if his cherished espousement was only a figment of his imagination these days....

"It was always Just A Dream..."

(My spell check says "espousment" isn't a word. But I know what you mean and can agree with your earlier remarks!)

 

[Xenophon PCDGS]

"It was always Just A Dream..."

(My spell check says "espousment" isn't a word. But I know what you mean and can agree with your earlier remarks!)

Espousement...with an E in the middle of the word....should give you a better result...

Blessed are the lexicologists, for they shall bring enlightenment to the eyes of those hard of spelling.

 

[transmanche]

What's the difference between exploiting esoteric loopholes to legally reduce the amount of taxes one pays, and exploiting esoteric loopholes to legally reduce the amount of rail fare one pays?

Now that's a very interesting point. Something for the Brains Trust to ponder - 'the morality of rail fare loopholes'...

 

[Eagle]

Now that's a very interesting point. Something for the Brains Trust to ponder - 'the morality of rail fare loopholes'...

I think the main difference is the amount of money you are depriving.

 

[transmanche]

I think the main difference is the amount of money you are depriving.

But are there different degrees of avoidance? Is split-ticketing the equivalent of investing in an ISA or pension (things we're all encouraged to do), with some of the more esoteric loopholes the equivalent of setting up an offshore trust (a la Jimmy Carr)?

 

[Eagle]

Perhaps we should introduce a Routeing Guide for taxes, so that we can work out if they're valid to go via Jersey, Luxembourg and the Caymans.

 

[bnm]

Perhaps we should introduce a Routeing Guide for taxes, so that we can work out if they're valid to go via Jersey, Luxembourg and the Caymans.

Taking care to avoid that negative easement that disallows a double-back through Lichtenstein.

 

[WillPS]

Vodafone are a seriously crap company. I refuse to award them with my custom, and others should too!

 

[Aldaniti]

Vodafone are a seriously crap company. I refuse to award them with my custom, and others should too!

Having bought a new smartphone from Vodafone at the beginning of the year, and experiencing their 'customer service', I can only say that describing them as 'seriously crap' is far too generous and polite. I just can't decide whether they are more or less crap than BT.

 

[D365]

Having bought a new smartphone from Vodafone at the beginning of the year, and experiencing their 'customer service', I can only say that describing them as 'seriously crap' is far too generous and polite. I just can't decide whether they are more or less crap than BT.

My sister bought a Vodafone-locked phone from a friend, was literally such a struggle to get it unlocked! Thy kept asking "Why are you leaving?" but the friend is still on Vodafone. By comparison, the O2 process seemed so much simpler...

 

[Eagle]

O2 did ask me why I was leaving, but the answer "I found a tariff that suited me better with Three" seemed to be reasonable to them and they let me go.

 

[Aldaniti]

My sister bought a Vodafone-locked phone from a friend, was literally such a struggle to get it unlocked! Thy kept asking "Why are you leaving?" but the friend is still on Vodafone. By comparison, the O2 process seemed so much simpler...

I agree about O2, I never had any hassle. I was tempted with a good deal from Vodafone but paid the price afterwards!

 

[Xenophon PCDGS]

I have found O2 to be an ideal mobile phone provider and have been with them since their inception. Mine now is just a "pay and go" involvement now I am retired, but I do miss the "hook the duck" monthly game.

 

[jon0844]

I have found O2 to be an ideal mobile phone provider and have been with them since their inception. Mine now is just a "pay and go" involvement now I am retired, but I do miss the "hook the duck" monthly game.

O2 is arguably one of the best voice/text networks and has very good coverage of rural areas, partly because of Government grants to ensure coverage for those areas.

I believe Vodafone site shares in many of these places, so Vodafone should be about equal in this regard.

But that's 2G only. Fine for voice, fine for text, great for battery life.. but pretty awful if you want mobile data. And that's where O2 falls down, big time. It has the worst 3G coverage by far, and it does make me rather fearful as to how it will roll out 4G.

As I've said before, O2 was nearly fined heavily for not reaching targets as part of its licence. It narrowly scraped through by claiming EDGE to be a 3G standard. To this day, it still has the least coverage and data speeds that are far slower (I am not aware of O2 rolling out the latest DC-HSPA standard that gives people near-4G speeds, as now offered by Three almost everywhere, EE in a very large area and Vodafone to a lesser degree - mainly cities).

I've disabled 2G to save battery (yes, 2G is better than 3G - but I save by not having the phone swapping around) and ensure that I get 3G data at all times. Many phones seem quite happy to find 2G then stick with it even though 3G is now back, and data over 2G is painful. In fact, often it doesn't work properly at all.

Vodafone is now 'simplifying' its PAYG tariffs by going from per second billing to per minute billing, which is nice. Vodafone has always been more expensive, seemingly trying to tell business users that it's like Stella - reassuringly expensive. In some way, people believe it to then have the best network and the best support. The reality can be quite different.

As the EU clamps down more on roaming, you can be sure that the likes of Vodafone will find more ways to increase revenue from people staying in the UK. I also believe the first thing you'll see (look at Vodafone's advertising) is that your mobile data bundles will be marked as 'UK only'. Why? So that when you roam, and can't be charged any more for data than at home, you'll now pay a per-MB rate that will be high in the UK too. Of course, you don't pay that rate as you have a bundle.. but, hey, UK-only..

I am sure other networks will follow Vodafone too.

 

[trentside]

We are talking about the same company that managed to get a £6bn tax bill wiped off a couple of years back? I don't give them my business, but given that most big companies seem to be at it in one way or another, there aren't that many ways to avoid them.

 

[jon0844]

The problem is it isn't illegal to do what these companies are doing, and even small businesses will do everything they can to avoid tax - it's human nature.

The law needs to be changed, not this 'morality' nonsense that appears to be asking companies to simply voluntarily pay more money than they legally have to.

I can see why has been like that for so long though. Politicians will be appeasing these companies but wanting to sound tough to the electorate - so it's a case of them saying 'This is outrageous and I'll do everything I can to stop it' while winking and nudging the company boss and whispering 'heh, don't worry, you'll be okay'.

 

[Oswyntail]

I see in the paper today that the Labour Party has, quite legitimately, reduced its Corporation Tax to 0 by offsetting its surplus on trading of £1.6 Million against losses incurred in 2011 (Conservative Party paid about £500,000; Lib Dems about £5!).
One can understand why such tax arrangements are in place for trading enterprises. This whole furore is so much manufactured indignation.
--- old post above --- --- new post below ---

...
The law needs to be changed, not this 'morality' nonsense that appears to be asking companies to simply voluntarily pay more money than they legally have to.....

Absolutely agree with the second part. And by all means change the tax regime, but make sure that all the consequences are analysed and understood. For instance, if you stop offsetting against losses the whole business plan of enterprises will have to change, meaning starting or developing business will be that much harder, with consequences for employment, etc. Complicated thing, finance.

 

[radamfi]

I've disabled 2G to save battery (yes, 2G is better than 3G - but I save by not having the phone swapping around) and ensure that I get 3G data at all times. Many phones seem quite happy to find 2G then stick with it even though 3G is now back, and data over 2G is painful. In fact, often it doesn't work properly at all.

How do you disable 2G?

As the EU clamps down more on roaming, you can be sure that the likes of Vodafone will find more ways to increase revenue from people staying in the UK. I also believe the first thing you'll see (look at Vodafone's advertising) is that your mobile data bundles will be marked as 'UK only'. Why? So that when you roam, and can't be charged any more for data than at home, you'll now pay a per-MB rate that will be high in the UK too. Of course, you don't pay that rate as you have a bundle.. but, hey, UK-only..

That's the problem with the regulation. A lot of people don't have bundles for calls and texts so the networks can't raise those prices too much, but most people use data as part of a bundle so the networks can effectively avoid EU capping.

 

[transmanche]

How do you disable 2G?

That depends on your phone. On my Nokia, it has an option for UMTS (i.e. 3G) only in the network settings.

 

[jon0844]

It doesn't just depend on the phone, but your SIM. This might have parameters set to hide certain options on the phone, and sometimes a handset will hide the options to stick to a specific band.

My phone (Xperia Z) has;

WCDMA only (3G)
GSM only (2G)
WCDMA preferred/GSM
LTE preferred/WCDMA/GSM

As such, if I selected LTE (which I don't as my SIM isn't 4G enabled) then I'd have to accept falling back to 2G too - which is annoying. However, as I don't, it's on WCDMA only and that works fine for me - even though when travelling, there's a chance I'll lose coverage when there's only GSM available.

For anyone that doesn't know, 4G is currently for data only. So when you make or receive a call, the phone must drop back to 3G or 2G.

 

[radamfi]

I've got a Nexus 4 and it only seems to have the option "Use only 2G networks"

 

[jon0844]

Ah yes, my N4 says:

'Use only 2G network
save battery''

Which isn't a lot of use. 2G does use less power, but I want high-speed data and would rather lock it to that.

BTW, have you had the Android 4.3 update for your Nexus 4 over the air yet? I keep checking and nothing (nothing for my Nexus 7 either).

One way to possibly do it is to go into the service menu; Open the dialler and enter *#*#INFO#*#* (INFO being 4636) and then go into 'Phone info' and down the screen, you'll see a drop down box where you can force the phone to any particular band. You'll probably need to change this every time you reboot.

 

[Drsatan]

We are talking about the same company that managed to get a £6bn tax bill wiped off a couple of years back? I don't give them my business, but given that most big companies seem to be at it in one way or another, there aren't that many ways to avoid them.

It's not Vodafone that's guilty of tax evasion: Starbucks, Barclays, Amazon, Tesco, Primark and many others are guilty of avoiding paying corporation tax through various means. The most common, to the best of my knowledge, is registering the company's head office in a known tax haven (like Luxembourg), and then transferring any revenue from the firm's UK subsidiary there. Any revenue transferred is only taxed at Luxembourg's rates rather than UK corporation tax rates.

Private Eye no. 1342 reports that Britain is now one of the world's capitals for money laundering due to the ease with which shell companies (companies that have just an address and are there for tax evasion purposes) can be set up. In fact, any edition of Private Eye will have a few articles about the ease with which it is possible to use all sorts of dirty tricks to avoid paying taxes if you're a businessman.

What's especially galling is that while HMRC basically allowed Vodafone to get away with paying just £1.25 billion out of £6 billion + of unpaid tax, while anecdotal evidence suggests that the same organisation will come down like a ton of bricks on ordinary taxpayers who make a mistake. For example, someone who was inadvertently overpaid tax credits may discover that HMRC wants every single penny back.

 

[jon0844]

It's tax avoidance, not tax evasion.

Tax is being paid, just at a lower rate and in another territory.

I agree about it being odd that Vodafone and others were able to effectively negotiate their tax bill.