More Vodafone and Topshop protests coming


by Sunny Hundal    
6:27 pm - December 16th 2010

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Campaigners from charities and Britain’s largest civil service union will tomorrow demonstrate outside the headquarters of HM Revenue and Customs.

War on Want and the Jubilee Debt Campaign will join with campaigners from PCS Union in a rally against reductions in HMRC resources.

They say that a “blitz” on tax dodgers is needed to avoid cuts in public services and jobs.

The call also had support from the Daily Mail today, which revealed that major companies and personalities were avoiding hundreds of millions of pounds in taxes every year.

The demonstration will take place outside HMRC HQ to oppose UK government plans that would axe a further 13,000 jobs in HMRC on top of the 30,000 that have gone since 2005 and the closure of around 200 offices.

On Saturday a mass action organised by the group UKuncut will take aim at high-street names Vodafone and the Arcadia group (which owns Topshop) over allegations of tax dodging.

UKuncut say:

Saturday December 18th is Pay Day, our next day of mass action. One week before Christmas, thousands of people across the country will be hitting the high streets to make sure tax dodgers pay.

Once again we will be targeting the multi-national and the multi-billionaire, Vodafone and Sir Philip Green. Both have been shaken up by the protests so far, but on December 18th they will face protests on a scale they could not have imagined just a few months ago. Vodafone and Arcadia will be targeted on every major high street in the UK. It’s up to you to make it happen.

You can sign up to the actions across the country on Saturday from this page.

(illustration for LC by Dave Howells / @davehowells)

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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments


1. Chaise Guevara

The “strange bedfellows” situation regarding this getting support from the Mail is pretty encouraging: anger seems to be widespread.

2. rob chewit

forgive me if i have already posted this….

its the nature of an enquiry..i read today that Deloitte the accountancy firm which advised vodafone to avoid tax..is now recruiting school leavers to its business, citing the tuition fee increase that might put young people off going to university..which sounds like they are using the tuition fee increase as a recruitment tool..

http://www.deloitte.com/view/en_GB/uk/careers/d2b27840594ec210VgnVCM3000001c56f00aRCRD.htm

now considring how high profile they have become..eg mentioned in articles in private eye in connection to HMRC in that a Deloitte advisor was asked to sort out out the vodafone matter by HMRC odd in itself…
plus treasury boss giving talks at Deloitte bash braggiing how companies were going to be let off lightly on corp tax..

http://www.private-eye.co.uk/sections.php?section_link=in_the_back&issue=1277

i find it troubling that our kids are now being trained as next gen tax fiddler advisors…..a sort of fagin if you like…

3. Dave

Think I may attend, I’ve never done any protesting before, is it a good place to pull?

4. Tim J

Since the protestors are asking Vodafone and Topshop to pay more tax than they are legally required to, what on earth do they expect HMRC to do about it?

5. Tim Worstall

How lovely. Protests that profits earned in Germany are not taxed in the UK and that foreigners who don’t live in Britain aren’t taxed in Britain.

6. rob chewit

protetors arn’t expecting these companies to pay MORE they are expecing to pay what they owe…its the companie who think they dont have to pay anything…

7. Chaise Guevara

@ 5

I don’t think many people think Vodafone should pay UK taxes on German earnings, Tim. It’s about paying UK taxes on UK earnings.

Although I have to say that if no laws have been broken then it’s the tax system that needs fixing, not the people legally taking advantage of it.

8. rob chewit

@7 er they have broken law hence HMRC persuing them, in fact HMRC have legal right and clout on their side..whats sickening is people from HMRC being advised by ppl from deloitte tax fiddlers to cut a deal whereby they’ve caved in grovellingly and made vodafones ‘burden’ lighter…

9. Tim Worstall

“I don’t think many people think Vodafone should pay UK taxes on German earnings, Tim. It’s about paying UK taxes on UK earnings.”

No, absolutely it isn’t.

Vodafone bought a German company, Mannesman. They bought it through their Luxembourg subsidiary. Two things then happened.

Vodafone Lux lent money to Vodafone Germany. The interest on this was paid back to Vodafone Lux.

Vodafone Germany made profits and paid the dividends from these profits to Vodafone Lux.

The two added together, the interest and the (already taxed in Germany note) profits amounted to £18 billion in Vodafone Lux.

To get to the Private eye number you just apply UK corporation tax to £18 billion: £6 billion.

But, as I say, those dividends in Germany have already been taxed in Germany. And German corporation tax/dividends tax is the same percentage as UK corporation tax. So no more tax (under any possible interpretation of UK tax law) is due in the UK.

The interest paid into Vodafone Lux pays Lux corporation tax on it. Which is lower than UK corporation tax. So, one way you can argue it (the way HMRC was) is that the difference between Lux corporation tax and UK corporation tax should be paid to HMRC. The other way you can argue it (as Vodafone did) is that under EU law and the freedom of incorporation this is just fine and dandy. Only if Vodafone moves the money from Lux to the UK should the extra tax be payable. The UK has something called CFC rules which do say that the money in Vodafone Lux should pay the extra tax: if they had been using Vodafone Cayman Islands (just to give an example) then it definitely would have had to pay the difference between the two corporation tax rates on the interest received.

But EU law means that CFC rules might not apply. In fact, probably don’t but just might.

That’s why a settlement at £1.25 billion: because it’s absolutely certainly not true that there was a £6 billion tax liability and it’s somewhere between possible and highly likely that there was no tax liability at all.

But do note the really important point. None of the tax, none of the economic activity, was ever taking place in the UK. Absolutely no one (expect ignorants freezing their nuts off outside Vodafone stores) has ever though it was. The entire case revolves around how much should HMRC get from a British domiciled company flogging phones and air time to Germans in Germany.

It does really rather depress me that so called “tax experts” like Richard Brooks at Private Eye, Richard Murphy and so on have never bothered to point all of this out. They’ve just rubbed their hands in glee at the protests going on.

Yes, I know, what did I expect…..except, perhaps, that those posing as experts actually, you know, be impartial like experts are supposed to be?

10. rob chewit

@9 ive never read such utter crap…if they arent liable at all, then why oh why did they call in deloitte the high profile tax fiddler to the rich and greedy.. then again have a member of deloitte ‘advise’ the tax boss who just happens to be a mate of his…and also why did vodapfone set aside £2-3 billion to pay the damn tax as far back as a few years go, only to find HMRC has grovellingly let them off at a much reduced rate… and why oh why do the tories turn up at deloitte bashes bragging how the corps tax is going to be slashed to the level of someone on £7k pa..


Reactions: Twitter, blogs
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  42. Tax The Fat Cats

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  43. An Inconvenient Truth « If You Tolerate This…

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