Vodafone's chairman has dismissed as "dead wrong" suggestions the company is not paying its fair share into the public purse. The multinational mobile giant has paid no UK corporation tax for the last two financial years, but Gerard Kleisterlee said Vodafone had benefited from deliberate government policy to encourage investment.
"You may have seen the recent media headlines alleging Vodafone doesn't pay its fair share of taxes in this country. Those headlines are dead wrong," said Kleisterlee. "It is also untrue that we are exploiting loopholes to minimise our UK corporation tax."
Last year Vodafone paid £3bn in corporation tax to other governments but its UK bill was zero thanks to a series of tax breaks. Although the company's underlying UK earnings were more than £1bn, tax breaks on investments in spectrum and interest payments on debt meant that HM Revenue and Customs claimed none of this money.
"The government wants to stimulate investment so it allows companies to offset the interest of their debt against the profits when determining their corporate tax base," said Kleisterlee. "Those rules are intentional, long established and carefully considered. They reflect deliberate policy decisions by successive UK governments and are a cornerstone of UK taxation policy."