Vodafone and benefit cuts

Why is there not enough money in the pot for the NHS, pensioners and the unemployed? Too many malingerers and cheats? Recession? A load of Botox!
While it may be necessary to make cuts, the biggest drain on our services is through Big Business not paying its way. If, for example, Vodafone, the world’s largest mobile telecommunications company measured by revenues, paid their £6bn tax bill, it would pretty much make benefit cuts unnecessary.

And forcing the unemployed to do unpaid work instead of finding them jobs will just benefit the businesses that employ them, not the tax-payer, while causing wages to drop for the employed.

It started a decade ago when Vodafone bought German engineering firm Mannesmann for 180 billion euros, and wanted to use tax avoidance schemes so taxpayers would subsidise what turned out to be a massively over-priced mistake. The plan was to route the acquisition through an offshore company.
Vodafone asked the then Inland Revenue to clear the arrangement, but it was ruled that the deal broke anti-tax avoidance rules and IR refused.

But in September Dave Hartnett, the HMRC’s permanent secretary for tax allowed the phone giant to avoid paying vast amounts of tax on profits racked up by a subsidiary based in a tax haven. The agreement between HMRC and Vodafone followed negotiations between revenue officers and John Connors (does he have his own Terminator?), Vodafone’s head of tax. Until 2007 Mr Connors worked closely with Dave Hartnett as a senior official at HMRC.

Up to March 2009, €15.5bn income – and by now about €18bn – was stuffed into the offshore company, resulting in £5bn in lost tax and interest so far. Dave’s apologised though, so it’s allright.

Vote with your feet and switch to the phone coop!

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