Vodafone Didn’t Pay Their UK Bill!

As Alexander Graham Bell cried out “Watson, come here I want to see you” back  towards the end of the 19th century, little did he know that there would be in the 21st century one mobile phone subscription for every man, woman, child and even baby on the planet that live within reach of a supply of electricity. Yes, there are over 5 billion cell-phone subscriptions that are pinging back and forth text messages and placing calls to each other all day long. Bell’s ears would be ringing now if he could hear that, anyhow.

But, would he have thought that it was possible for the UK government to give enough tax breaks to Vodafone so that they ended up paying no corporation tax at all? But, hang on they are not on a par with those companies that get around paying tax and avoid doing so by the creation of their elaborate Dutch and Luxemburg sandwiches, as Vodafone actually pays tax in other countries to the tune of £2.6 billion.

The British government has been cut off and left asking to be reconnected, haven’t they? From reality, I mean.

Vodafone is the second largest cell phone company in terms of revenue. That’s the second year they haven’t paid any tax in the UK. Revenue for 2012 stood at £45 billion and they made a profit of £3 billion last year. The UK accounts for about £5 billion in revenue for the company. Yet, still nothing. Zilch, nada! Even if they had agreed to pay diddly-squat it would have been something, wouldn’t it?

I imagine the only British tax payers that are happy are the ones that are being given a share in the £4.8 billion dividends that were dished out by the company. That all came about because for Vodafone the value of their stocks is on the up and up. Value increased by 13% last year alone.

Corporation Tax in the UK stands at 20%, rising to 23% when profits exceed £1.5 million. Looks like Vodafone comes into that bracket, doesn’t it? Vodafone UK employs some 11.5 thousand people. Admittedly, the British government looks like it wants to roll out the red carpet to Vodafone (as it has already mentioned on numerous occasions to others) making the UK a place to be and a place to stay. But, has Vodafone left the other countries where it has had to pay out for corporation tax? Are the 11 thousand-odd people working for Vodafone really worth the drop in gains that would be made from 23% of the profit of Vodafone UK? It looks like a hefty phone bill this year again which will take some swallowing by the general public.

To boot, Vittorio Colao, CEO of Vodafone, got a nice tidy increase in his salary too. It wasn’t much, just £11 thousand. But, that’s probably £11 thousand more than others got. He’s now earning £1.11 million. That was with healthcare and car allowance tripling from £6, 000 to £30, 000. His total package is in the region of £2.23 million ($3.47 million)

Vittorio Colao, CEO Vodafone

Vittorio Colao, CEO Vodafone

“Vittorio, come here, I want to see you!”

“Oh, no! I can’t hear you Mr. Cameron. I’m going into a tunnel. I’ll call you back”.

Probably not worth calling him back. Neither of them probably paid their bills!

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tothetick

Professional team of writers/analysts analyzing the financial markets.

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