It has been reported in The Guardian that Vodafone reached a previously undisclosed multimillion pound tax deal with HMRC over an Irish subsidiary, which collected royalty payments from operating companies and joint ventures around the world.
Andrew Watters, tax partner at law firm Thomas Eggar, said: ‘The story about the Vodafone tax deal with HMRC over its Irish Office has triggered suggestions that it falls foul of current government rules and should be blocked from government contracts. It is an example of the confusion that the recent political debate on “tax avoidance” has caused.
‘If every tax dispute resulted in litigation, this would not be good for the state or the taxpayer. Vodafone denies “tax avoidance”. It does not argue that the existence of the Irish company resulted in a lower tax bill or that it prefers a higher rather than a lower tax bill. It points to the fact that HMRC has not alleged “wrongdoing”. And the word “wrongdoing” is quite close to the idea of tax “abuse”. Companies accused of tax abuse can be disqualified from working for the government.’
It has been reported in The Guardian that Vodafone reached a previously undisclosed multimillion pound tax deal with HMRC over an Irish subsidiary, which collected royalty payments from operating companies and joint ventures around the world.
Andrew Watters, tax partner at law firm Thomas Eggar, said: ‘The story about the Vodafone tax deal with HMRC over its Irish Office has triggered suggestions that it falls foul of current government rules and should be blocked from government contracts. It is an example of the confusion that the recent political debate on “tax avoidance” has caused.
‘If every tax dispute resulted in litigation, this would not be good for the state or the taxpayer. Vodafone denies “tax avoidance”. It does not argue that the existence of the Irish company resulted in a lower tax bill or that it prefers a higher rather than a lower tax bill. It points to the fact that HMRC has not alleged “wrongdoing”. And the word “wrongdoing” is quite close to the idea of tax “abuse”. Companies accused of tax abuse can be disqualified from working for the government.’
