Activists angered by reports Vodafone has not paid enough British tax on a decade-old acquisition as the government embarks on deep public spending cuts, are planning protests at Vodafone shops this weekend.
Activists angered by reports Vodafone has not paid enough British tax on a decade-old acquisition as the government embarks on deep public spending cuts, are planning protests at Vodafone shops this weekend.
UK Uncut, a movement that has sprung up since the government announced 80 billion pounds ($129 billion) in cuts last month, is planning protests to shut down Vodafone stores in Brighton, Bristol, Cambridge, Glasgow, Newscastle and Nottingham.
An article published in satirical magazine Private Eye in September alleged that the government let Vodafone off with at least 6 billion pounds in a tax deal related to its 2000 acquisition of German telecoms conglomerate Mannesmann.
Vodafone, which agreed a tax settlement of 1.25 billion pounds in July to resolve the long-running dispute, said it has met all its tax obligations and has never received a bill for 6 billion pounds, calling the figure "misleading".
British government spending cuts, designed to reduce a record peacetime budget deficit of 11 percent of gross domestic product, are the deepest in a generation.
UK Uncut is organising itself via the internet, Facebook and Twitter, and has held several protests that have temporarily shut Vodafone shops.
A spokesperson for Vodafone, the world's biggest mobile phone group by revenue, said on Friday the protests had had minimal impact so far, and denied Vodafone had avoided any tax.
"We obviously do meet all our tax obligations," he said. "The 6 billion figure was absolutely misleading."
An HMRC spokesperson said: "We cannot comment on the detail of the settlement but we can confirm that it was reached by HMRC following a rigorous examination of the facts and an intensive process of negotiation."
"As a result it was agreed that Vodafone's liability was 1.25 billion pounds and at no point was a liability greater than that established. There is no question of Vodafone having an outstanding tax liability of 6 billion pounds."
Vodafone bought Mannesmann in a 180 billion pound hostile takeover through its Luxembourg office. The dispute with British tax authorities centred on whether the office was a genuine business concern or not.
The telecoms group is also fighting a 112 billion-rupee ($4 billion) tax bill in India relating to its 2007 acquisition of Hutchison Whampoa's Indian operations.
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