Vodafone's £12bn Tax Avoidance & The Disgusting Truth About The Class War

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While the poor and disabled are tagged as benefit scroungers the big corporations are allowed to carry or regardless...

Politics increasingly throws up bizarre contrasts. Or, as most would correctly see things, breathtaking examples of brazen hypocrisy. In this regard, these past two weeks have been particularly instructive.

On the one hand, the Tories announce a series of measures to deal with the latest spin on the old cash-for-questions scandal by? attacking the Trade Unions? financial support for Labour. Even their own backbenchers appeared visibly embarrassed because, as everyone knows, there isn?t a single example of political funding, anywhere across the UK spectrum, that is as open, democratic and accountable as this. The strings, checks, balances and scrutiny and red-tape surrounding Labour?s financial support is simply unequalled in any other area (quite why the Unions continue to shovel cash into the coffers of Blue Labour while they consistently adopt Tory polices that are in direct opposition to their members? interests, is a question for another time).

On the other hand, contrast that with Tory ministers? privatising the NHS while sitting on boards of companies and owning shares in those ?service providers? directly benefitting from such a move and, well, that?s precisely the kind of hypocrisy that could make a person sick

Let?s be even-handed, though, and not just indulge in gratuitous Tory-bashing. Miliband?s disgusting spinelessness and complete capitulation to neoliberalism spawns equally nauseating examples of hypocrisy. Just the other day, for instance, UK capitalism?s second eleven announced its intention to retain Tory caps on benefit spending; buying wholesale into the despicable ?scroungers versus strivers? narrative.

For the ignorant, lazy-thinking and just plain nasty, this makes sense. After all, why should families who feature generations stretching all the way back to the Bronze Age who haven?t worked a single day between them, enjoy luxurious life-styles in ten-bedroom council houses with mile-wide plasma TV screens and a private jet parked next to the out-door spa? Just not on, is it?

One wonders, then, what Blue Labour might be thinking of doing in terms of really cracking down on these offenders. You see, If you?re a top executive with Goldman Sachs it seems you can arrange a cozy lunch-date with Her Majesty?s head tax bod and amicably agree to waive the £20 million in tax you owe the UK exchequer. Mind you, that?s just chump change compared to the £7 billion, yes, you read that correctly, that Her Maj?s generous tax officials decided last year to write off so those poor Vodafone execs could sleep a wee bit easier in their beds of a cold, winter?s eve. After all, struggling along on their multi-million pound salaries and bonuses, share options and gold-plated pension-plans must be hard enough without having the stress of worrying about such trifles as legal obligations, the law and tax. To pile insult upon nausea, it?s just been reported that the communications giant has avoided paying any corporation tax for a second year running.

So this company makes use of British infrastructure; roads, comms, transport, NHS, cheap labour and a great deal more but dodges the £12 billion it owes over the last two years? That?s some seriously impressive scrounging right there. Still, let?s be fair here; it?s not as though these worthies are grubby, sink-estate chavs cleaning a few windows on the side so the poor tax-payer is ripped off for an extra thirty or forty quid a week now is it? And at least these fellas are, mostly, white. It?s not as if they?re shifty Pakistanis or predatory Poles flocking over here in their millions and emptying the nation?s purse of those oh-so generous benefits, is it?

The Department of Work and Pensions estimates benefit fraud at around 0.07 per cent from a total benefits bill of £5.5 billion. Let us be brutally clear, here; it?s absolute chump-change compared to tax avoidance (immoral but legal) which, along with corporate fraud, swindles, con-jobs and tax evasion (all illegal and still immoral) costs us a significantly larger £150 billion per year. One rule for the rich and one rule for the poor. A carrot for those at the top and a big shitty stick for those at the bottom. That?s the reality of class war.

RMT President, Bob Crow, on Thursday?s This Week, pithily observed, ?You pay tax and you buy civilisation? and he?s absolutely right. While we have thousands of terminally-ill and disabled people scapegoated as scroungers and then witch-hunted off benefits by ATOS to die like dogs, we badly need some civilisation. While the poorest and most vulnerable in our society are subjected to an obscene and hysterical propaganda offensive as ?shirkers? we need, more than ever, some civilisation in our increasingly mean-spirited and vicious nation.

So let?s crack down hard on the real scroungers and shirkers. Yes, Vodafone et al; we?re looking at you.

Harry Paterson

www.dorseteye.com/north/articles/vodafone-s-12bn-tax-avoidance-and-the-disgusting-truth-about-the-class-war

Edam, I think we agree on the kind of behavior that we should see coming out of big corporations, but I disagree that it should be voluntary in the absence of government enforcement.

If you want corporates to "support local schools" - that's taxes. If you want them not to pollute - that's environmental regulations. Not corporate citizenship.

This isn't a party political point and shouldn't be made into one but as usual it is.

The tax laws need to be reviewed to catch the businesses. However if Vodafone and others suddenly have to start paying huge corporation tax what's to say they won't move elsewhere and take a lot of the jobs with them.

Its a fine line and one that is too important to be used to score political points.

OP, would you care to expand upon how you think Vodaphone have been scrounging and shirking?

They paid no corporation tax because they didn't have any taxable profits. They have not engaged in aggressive tax avoidance. Although not paying corporation tax, they have been contributing hugely to the UK exchequer in the form of VAT, business rates, employing huge numbers of people and therefore PAYE and employers' NIC.

It's easy to bash large corporations. But you gotta have a reason for bashing them ...

Ha ha ha ha ha

Sorry, that was a response to Xenia's hilarious joke.

If I buy goods for £99 and sell them for £100 my profit is £1 and I am taxed on that profit. I think the press and public are losing sight of this when they criticise companies. Why should you be taxed on money you don't have and profit you don't make?

Edam - so, by your analogy, you would willingly pay more tax than you are required to do so. Have you? Do you ask that HMRC amend your tax code to pay extra?

No? Then why should companies do so?

Vodafone paid a huge amount to Government for mobile licenses. In order to do this they borrowed money. The interest on that debt offsets profit - hence loss making and no corporation tax. Vodafone contributes hugely to the economy as an employer

I have always been quite right wing in my political views but in the last few years, I catch myself nodding at articles/posts like the OP's.

I know fuck all about taxation but it is becoming increasingly clear that the Government will go after and vilify the little guy just because they can and the big corporations can do what they want.

I don't think companies like Vodafone are good employers with their minimum wages and short term contracts.

That doesn't stop you being right-wing. It means that you're opposed to corporatism which is anathema to traditional conservative values, which are inherently small-state and small-business.

I know fuck all about taxation but it is becoming increasingly clear that the Government will go after and vilify the little guy....

Actually I'd argue the complete opposite is actually true. There's much more vilifying corporations than the 'little guy'

Historically corporation tax has not been anywhere near the biggest income generator for the government. But people vote, companies do not. So right now it's politically expedient to blame a faceless corporation rather than face the fact that fundamentally we've still got a whacking deficit and this government hasn't even come close to plugging it.

It smacks me incredibly stupid to blame Vodafone for not paying corporation tax when the very reason they are not doing is because they borrowed billions to buy an overpriced 3G license from the government. We've benefited from that income, now Vodafone have to pay their hefty bank loan off.

There is a lot of tax avoidance going on. That much is not in doubt. But the real questions are who pays taxes they don't have to? I don't. I bet you don't. So why is it immoral for someone else to legally avoid tax but for us it's simple common sense?

niceguy-

Yeah, sure, niceguy... so presumably you're going to be lobbying the government to increase corporate tax rates and close tax loop-holes?

Oh wait, no you won't, because you've repeated stated that you want corporate taxes to be lower to be 'competitive'.

niceguy-

I know fuck all about taxation but it is becoming increasingly clear that the Government will go after and vilify the little guy....

Actually I'd argue the complete opposite is actually true. There's much more vilifying corporations than the 'little guy'

Yes of course you would. That would certain continue the pattern...

Historically corporation tax has not been anywhere near the biggest income generator for the government.

Misleading. It may not have been the biggest share, but corporations have historically paid higher levels of taxation, and paid a much higher proportion of total tax revenue. Corporations have never had it easier.

But people vote, companies do not. So right now it's politically expedient to blame a faceless corporation rather than face the fact that fundamentally we've still got a whacking deficit and this government hasn't even come close to plugging it.

People are right to attack corporations when they lobby to pay lower taxes and interfere and subvert democratic processes.

This 'whacking deficit' was caused by the financial crisis and the government are making the problem worse with their austerity measures. Borrowing is up and the economy is performing worse than many other countries which have not implemented such brutal austerity.

There is a lot of tax avoidance going on. That much is not in doubt.

Tens of billions of pounds. More than enough to pay for every misguided cut from the budget so far.

But the real questions are who pays taxes they don't have to? I don't. I bet you don't. So why is it immoral for someone else to legally avoid tax but for us it's simple common sense?

That's one thing we agree on. It's not a moral issue. Capitalism isn't moral. It's amoral. The laws should change to that tax avoidance is made harder and penalised more harshly.

I doubt you will be joining me.

I doubt you will be joining me.*

• ... in calling for this change.