View Full Version : Vodafone flash mob in London confronting corporate criminals and educating the public.

Magda Hassan
10-31-2010, 07:57 AM
I like to see a nice bit of direct action.


Magda Hassan
10-31-2010, 08:11 AM
Johann Hari: Protest works. Just look at the proof

Yes, you can choose to do nothing. But you will be choosing to let yourself and your family and your country be ripped off

Friday, 29 October 2010

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There is a ripple of rage spreading across Britain. It is clearer every day that the people of this country have been colossally scammed. The bankers who crashed the economy are richer and fatter than ever, on our cash. The Prime Minister who promised us before the election “we’re not talking about swingeing cuts” just imposed the worst cuts since the 1920s, condemning another million people to the dole queue. Yet the rage is matched by a flailing sense of impotence. We are furious, but we feel there is nothing we can do. There’s a mood that we have been stitched up by forces more powerful and devious than us, and all we can do is sit back and be shafted.
This mood is wrong. It doesn’t have to be this way – if enough of us act to stop it. To explain how, I want to start with a small scandal, a small response – and a big lesson from history.
Related articles

French protesters in final appeal to Sarkozy (http://www.independent.co.uk/news/world/europe/french-protesters-in-final-appeal-to-sarkozy-2119455.html)
Search the news archive for more stories (http://www.news-archive.independent.co.uk/)

In my column last week, I mentioned in passing something remarkable and almost unnoticed. For years now, Vodafone has been refusing to pay billions of pounds of taxes to the British people that are outstanding. The company – which has doubled its profits during this recession – engaged in all kinds of accounting twists and turns, but it was eventually ruled this refusal breached anti-tax avoidance rules. They looked set to pay a sum Private Eye calculates to be more than £6bn.
Then, suddenly, the exchequer – run by George Osborne – cancelled almost all of the outstanding tax bill, in a move a senior figure in Revenues and Customs says is “an unbelievable cave-in.” A few days after the decision, Osborne was promoting Vodafone on a tax-payer funded trip to India. He then appointed Andy Halford, the finance director of Vodafone, to the government’s Advisory Board on Business Tax Rates, apparently because he thinks this is a model of how the Tories think it should be done.
By contrast, the Indian government chose to pursue Vodafone through the courts for the billions in tax they have failed to pay there. Yes, the British state is less functional than the Indian state when it comes to collecting revenues from the wealthy. This is not an isolated incident. Richard Murphy, of Tax Research UK, calculates that UK corporations fail to pay a further £12bn a year in taxes they legally owe, while the rich avoid or evade up to £120bn.
Many people emailed me saying they were outraged that while they pay their fair share for running the country, Vodafone doesn’t pay theirs. One of them named Thom Costello decided he wanted to organize a protest, so he appealed on Twitter – and this Wednesday seventy enraged citizens shut down the flagship Vodafone store on Oxford Street in protest. “Vodafone won’t pay as they go,” said one banner. “Make Vodafone pay, not the poor,” said another.
The reaction from members of the public – who were handed leaflets explaining the situation – was startling. Again and again, people said “I’m so glad somebody is doing this” and “there needs to be much more of this.” Lots of them stopped to talk about how frightened they were about the cuts and for their own homes and jobs. The protest became the third most discussed topic in the country on Twitter, meaning millions of people now know about what Vodafone and the government have done.
You might ask – so what? What has been changed? To understand how and why protest like this can work, you need some concrete and proven examples from the past. Let’s start with the most hopeless and wildly idealistic cause – and see how it won. The first ever attempt to hold a Gay Pride rally in Trafalgar Square was in 1965. Two dozen people turned up – and they were mostly beaten by the police and arrested. Gay people were imprisoned for having sex, and even the most compassionate defense of gay people offered in public life was that they should be pitied for being mentally ill.
Imagine if you had stood in Trafalgar Square that day and told those two dozen brave men and women: “Forty-five years from now, they will stop the traffic in Central London for a Gay Pride parade on this very spot, and it will be attended by hundreds of thousands of people. There will be married gay couples, and representatives of every political party, and openly gay soldiers and government ministers and huge numbers of straight supporters – and it will be the homophobes who are regarded as freaks.” It would have seemed like a preposterous statement of science fiction. But it happened. It happened in one lifetime. Why? Not because the people in power spontaneously realized that millennia of persecuting gay people had been wrong, but because determined ordinary citizens banded together and demanded justice.
If that cause can be achieved, through persistent democratic pressure, anything can. But let’s look at a group of protesters who thought they had failed. The protests within the United States against the Vietnam War couldn’t prevent it killing three million Vietnamese and 80,000 Americans. But even in the years it was “failing”, it was achieving more than the protestors could possibly have known. In 1966, the specialists at the Pentagon went to US President Lyndon Johnson – a thug prone to threatening to “crush” entire elected governments – with a plan to end the Vietnam War: nuke the country. They “proved”, using their computer modeling, that a nuclear attack would “save lives.”
It was a plan that might well have appealed to him. But Johnson pointed out the window, towards the hoardes of protesters, and said: “I have one more problem for your computer. Will you feed into it how long it will take 500,000 angry Americans to climb the White House wall out there and lynch their President?” He knew that there would be a cost – in protest and democratic revolt – that made that cruelty too great. In 1970, the same plan was presented to Richard Nixon – and we now know from the declassified documents that the biggest protests ever against the war made him decide he couldn’t do it. Those protesters went home from those protests believing they had failed – but they had succeeded in preventing a nuclear war. They thought they were impotent, just as so many of us do – but they really had power beyond their dreams to stop a nightmare.
Protest raises the political price for governments making bad decisions. It stopped LBJ and Nixon making the most catastrophic decision of all. The same principle can apply to the Conservative desire to kneecap the welfare state while handing out massive baubles to their rich friends. The next time George Osborne has to decide whether to cancel the tax bill of a super-rich corporation and make us all pick up the tab, he will know there is a price. People will find out, and they will be angry. The more protests there are, the higher the price. If enough of us demand it, we can make the rich pay their share for the running of our country, rather than the poor and the middle – to name just one urgent cause that deserves protest.
And protest can have an invisible ripple-effect that lasts for generations. A small group of women from Iowa lost their sons early in the Vietnam war, and they decided to set up an organization of mothers opposing the assault on the country. They called a protest of all mothers of serving soldiers outside the White House – and six turned up in the snow. Even though later in the war they became nationally important voices, they always remembered that protest as an embarrassment and a humiliation.
Until, that is, one day in the 1990s, one of them read the autobiography of Benjamin Spock, the much-loved and trusted celebrity doctor, who was the Oprah of his day. When he came out against the war in 1968, it was a major turning point in American public opinion. And he explained why he did it. One day, he had been called to a meeting at the White House to be told how well the war in Vietnam was going, and he saw six women standing in the snow with placards, alone, chanting. It troubled his conscience and his dreams for years. If these women were brave enough to protest, he asked himself, why aren’t I? It was because of them that he could eventually find the courage to take his stand – and that in turn changed the minds of millions, and ended the war sooner. An event that they thought was a humiliation actually turned the course of history.
You don’t know what the amazing ripple-effect of your protest will be – but wouldn’t Britain be a better place if it replaced the ripple of impotent anger so many of us are feeling? Yes, you can sit back and let yourself be ripped off by the bankers and the corporations and their political lackeys if you want. But it’s an indulgent fiction to believe that is all you can do. You can act in your own self-defence. As Margaret Mead, the great democratic campaigner, said: “Never doubt that a small group of thoughtful people could change the world. Indeed, it's the only thing that ever has.”
For updates on this issue and others, you can follow Johann on twitter at www.twitter.com/johannhari101 (http://www.twitter.com/johannhari101) or you can email him at j.hari@independent.co.uk
To watch Johann on US TV discussing Britain's austerity cuts, click here (http://www.youtube.com/watch?v=b3ozOpqh9WM).
To read Johann's latest article for Slate, about one of the great taboos of our time, click here click here (http://www.slate.com/id/2272098).

Jan Klimkowski
10-31-2010, 04:11 PM
For years now, Vodafone has been refusing to pay billions of pounds of taxes to the British people that are outstanding. The company – which has doubled its profits during this recession – engaged in all kinds of accounting twists and turns, but it was eventually ruled this refusal breached anti-tax avoidance rules. They looked set to pay a sum Private Eye calculates to be more than £6bn.
Then, suddenly, the exchequer – run by George Osborne – cancelled almost all of the outstanding tax bill, in a move a senior figure in Revenues and Customs says is “an unbelievable cave-in.” A few days after the decision, Osborne was promoting Vodafone on a tax-payer funded trip to India. He then appointed Andy Halford, the finance director of Vodafone, to the government’s Advisory Board on Business Tax Rates, apparently because he thinks this is a model of how the Tories think it should be done.
By contrast, the Indian government chose to pursue Vodafone through the courts for the billions in tax they have failed to pay there. Yes, the British state is less functional than the Indian state when it comes to collecting revenues from the wealthy. This is not an isolated incident. Richard Murphy, of Tax Research UK, calculates that UK corporations fail to pay a further £12bn a year in taxes they legally owe, while the rich avoid or evade up to £120bn.

This is what the Tories have always meant by running a "business friendly" government.

Of course, Anglo-Irish aristocrat George Gideon Oliver Osborne is a member, by birth, of the Protestant Ascendancy, which is Irish for reactionary WASP.

Magda Hassan
11-27-2010, 10:38 PM

Danny Jarman
12-04-2010, 12:24 PM
UK Uncut protesters spied upon by undercover police

At least two plain-clothes officers of Met police's Forward Intelligence Teams spotted at London tax avoidance protest

Scotland Yard has deployed undercover officers to spy on a network of activists whose viral campaign (http://www.guardian.co.uk/world/2010/nov/29/philip-green-protest-alleged-tax-avoidance) against tax avoiders threatens to close down hundreds of shops in the run-up to Christmas. The surveillance officers were first used at a protest (http://www.guardian.co.uk/world/protest) in October, the Guardian can reveal, despite an assurance given to parliament last year that only officers in full uniform gather intelligence (http://www.guardian.co.uk/politics/2009/nov/24/g20-undercover-police-broadhurst) at protests.

The group being monitored, UK Uncut (http://www.ukuncut.org.uk/), will target high-street stores in 20 cities tomorrow, in its latest attempt to draw attention to the estimated £25bn the Treasury loses each year in tax avoidance (http://www.guardian.co.uk/business/taxavoidance).

Last year the Guardian's tax gap investigation (http://www.guardian.co.uk/business/series/tax-gap) found taxpayers had to plug a multibillion-pound hole in the public finances as hundreds of the biggest companies increasingly employed complex and secretive tax arrangements.
In recent weeks activists inspired by UK Uncut closed more than 30 Vodafone shops (http://www.guardian.co.uk/business/2010/oct/29/vodafone-cuts-tax-protest) after the campaign went viral through the use of a Twitter hashtag – #ukuncut (http://twitter.com/#ukuncut) – which helps users share messages.

Sir Philip Green, the retail billionaire and efficiency adviser to the government, has become UK Uncut's latest target (http://www.guardian.co.uk/world/2010/nov/29/philip-green-protest-alleged-tax-avoidance), with stores in his Arcadia Group – including Topshop, Dorothy Perkins, Burton and Miss Selfridge – being targeted tomorrow. Green banked the biggest pay cheque in corporate history in 2005 when his business paid a £1.2bn dividend to his wife, Tina, who resides in the tax haven of Monaco. He has previously said his affairs are "not relevant" and that he pays "tens and tens of millions of pounds" in tax.

Other companies that will be targeted by protesters tomorrow are Boots, Barclays, Lloyds and HSBC.

The transformation of UK Uncut from a pub gathering to a potential network of upwards of 30,000 people in six weeks is a textbook example of how protesters mobilise through Twitter. It also reveals the lengths police (http://www.guardian.co.uk/uk/police) are going to gather intelligence on the burgeoning movement.

It was in the Nags Head pub in north London that about 10 like-minded activists, many of them environmental campaigners and almost all in their 20s, hatched the idea of targeting alleged tax avoiders.

Discussing options to George Osborne's plans for £83bn of public spending cuts, which had been unveiled two days earlier, they decided a credible alternative was to clamp down on tax avoidance (http://www.guardian.co.uk/business/taxavoidance).

"It was the kind of conversation people were having at pubs across the country," said Neil, 26, one of those present. Another activist, a 26-year-old charity worker, added: "We just sort of said, in terms of the cuts, something needs to happen. The idea of the tax gap dispels the myth that there is no alternative to cuts."

They put a message on the internet for people to participate in a direct action aimed at alleged tax avoiders on 27 October. Their target, a Vodafone store on Oxford Street, in central London, was chosen after internet research suggested the company avoided £6bn in tax. Both Vodafone and the tax office deny the accusation.The night before the protest, the group created a Twitter account – @ukuncut (http://twitter.com/ukuncut) – and the accompanying hashtag that would allow others to rally around the issue. The first tweet said: "This is the official Twitter account for tomorrow's direct action in London. Meet 9:30AM at the Ritz - look for the orange umbrella #UKuncut."

More than 60 people arrived the following morning at a rendezvous on Piccadilly. At least two undercover police officers working for the Met's Forward Intelligence Teams (FITs) were also present.

Until then, FIT officers had always conducted "overt" surveillance with cameras. This time they were dressed as shoppers. A press photographer, Jonathan Warren, recognised one FIT officer and took their photograph. "They suddenly became very shy, as if I had spooked them, and then they just disappeared," he said. The use of undercover officers in this way appears to be new.

Responding to previous reports that plain-clothes officers were deployed at the G20 protests last year, Commander Bob Broadhurst, who runs the Met's public order unit CO11, told a parliamentary committee in May last year: "The only officers we deploy for intelligence purposes at public order are forward intelligence team officers who are wearing full police uniforms with a yellow jacket with blue shoulders."

In a statement this week, the Met said plain-clothes officers were frequently deployed in "day to day" policing. "It is key that as a police service we observe and gather information to provide us with a relevant and up-to-date intelligence picture of what to expect in terms of protest groups and public order policing."

The first UK Uncut protest elicited interest across the UK, as far north as Kilmarnock, where one Twitter user, @johnniesloan (http://twitter.com/johnniesloan), appeared to have begun a simultaneous copycat protest. He wrote: "Just stopped 2 folk going in the vodaphone shop in killie. Set up outside. #UkUncut."

Within 24 hours the idea of targeting Vodafone had spread to Leeds, where three stores were closed. By the weekend stores across the country were being occupied. The #ukuncut hashtag has been used tens of thousands of times since, including to help organise dozens of high-street store occupations and, most notably, three mass demonstrations against the government's plans to increase tuition fees.

This week two mainstream anti-poverty organisations – the Jubilee Debt Campaign (http://www.jubileedebtcampaign.org.uk/) and War on Want (http://www.waronwant.org/) – pledged to support UK Uncut. A third, the influential group Compass, announced today it would support tomorrow's protests.

"Over 15 times more is lost to tax avoidance at the top, than is lost to benefit fraud at the bottom," claimed its campaigns organiser, Joe Cox. "We want to make sure the government acts."
There will be protests tomorrow in cities including London, Birmingham, Brighton, Bristol, Cambridge, Edinburgh, Glasgow, Leeds, Leicester, Liverpool, Nottingham, York and Sheffield.


David Guyatt
12-04-2010, 12:51 PM
"Over 15 times more is lost to tax avoidance at the top, than is lost to benefit fraud at the bottom," claimed its campaigns organiser, Joe Cox.

"Tax is for the poor" - didn't the $100 million net worth, serial marrying machine Ivana Trump say that once...

In any event the above quote clearly illustrates the disingenuity of the normal pol bitch about benefit fraud.

Magda Hassan
12-04-2010, 01:06 PM
I think it was Leona Helmsley, who left 12 million $ to her dog who said that but I'm sure Ivana thought it anyway. Her quote of note was "Don't get mad get even" when Donald dumped her for the latest model. But it is a philosophy held by many if not most wealthy.

Magda Hassan
06-28-2012, 03:17 AM
INSIGHT-Vodafone in new 1 bln stg UK tax 'scandal'

LONDON, June 26 | Tue Jun 26, 2012 6:53am EDT

(Reuters) - The world's largest mobile phone company, Vodafone Group, has shaved 1 billion pounds, and possibly more, off the taxes its UK operating unit might have paid in the past decade, thanks to accounting factors not seen at other European units.
A Reuters examination of statutory filings made by Vodafone across Europe over the past 16 years shows the UK taxman has often gone empty handed, while tax authorities in Germany (http://www.reuters.com/places/germany), Spain and elsewhere have raked in billions of euros.
Indeed, rather than incurring UK tax in recent years, Vodafone has racked up tax credits such that it may not have to pay any tax on its UK operations for the foreseeable future.
Vodafone's low UK tax bill is in spite of soaring revenues here and the fact that Chief Executive Vittorio Colao has repeatedly told investors that Britain was one of the group's stronger performing markets.
"This is yet another tax scandal," said Member of Parliament Margaret Hodge, chair of the parliamentary Public Accounts Committee, which scrutinises public expenditure and revenue-raising.
"It may be legal, but it's completely immoral. They make money out of Britain, and they should put money back into Britain."
Vodafone declined to answer most questions about its accounts, citing commercial sensitivity. It said it was committed to acting with integrity and transparency in all tax matters, while also having a responsibility to shareholders to control tax costs.
There is no suggestion the company has behaved unlawfully, and arranging its affairs in a tax-efficient manner within the law is standard business practice.
"Paying more than was required would be a dereliction of duty to shareholders," said Robin Bienenstock, research analyst at Sanford C Bernstein in London.
The British tax authorities, which lawmakers last year accused of being "too cosy" with big business, the Treasury and Vodafone Limited's auditor Deloitte said they could not comment on individual companies' tax affairs.
Tax avoidance is already at the top of the political agenda in the UK; last week Prime Minister David Cameron said popular comedian Jimmy Carr was "morally wrong" to shelter 3.3 million pounds of income from tax by using an apparently legal tax avoidance scheme.
Tax campaigners say the tough approach to individuals avoiding tax contrasts with a lax approach toward corporations doing the same.
Between 1998 and 2003, Vodafone's UK unit, Vodafone Ltd, made annual profits of around 530 million pounds and paid taxes of around 170 million each year, its accounts show.
While revenues have soared since 2003, reported profits have plunged. In the past three years, the UK unit has racked up losses in excess of 100 million pounds each year.
The profit collapse is tied to two factors, the accounts show.
In 2001, Vodafone limited began making large interest payments on money it borrowed from companies within the Vodafone group.
In the 10 most recent years for which accounts have been published, Vodafone Ltd paid associated companies 3.3 billion pounds in interest.
This reduced the UK unit's taxable profits by a commensurate amount because interest payments are tax deductible.
Using the prevailing corporation tax rates at the time, this translated to savings worth 961 million pounds to Vodafone Ltd, either in reduced taxes, or by generating tax credits that could be used to offset future profits.
Tax experts say there have been cases where UK companies have established units in Luxembourg, which then lend the money back to UK units, as a tax avoidance mechanism.
This reduces profit in the UK, where corporate profits are taxed at 24 percent - down from 30 percent a few years ago - while generating profits in Luxembourg, where financial profits can be taxed at rates under 1 percent.
Vodafone has a Luxembourg-based unit, Vodafone Investments Luxembourg S.a.r.l., which it says on its website was "established as the main financing company for our many operations around the world".
A spokesman said Vodafone Limited's interest payments were to other UK-based units of Vodafone but declined to say whether these units had in turn borrowed the money from Vodafone Investments Luxembourg.
The dramatic rise in inter-company interest payments seen at the UK unit is not reflected at other Vodafone units in Europe.
Vodafone D2 GmbH, the phone giant's Duesseldorf-based German unit, paid less than 2 million euros in interest to affiliated companies in the year to March 2011, the most recent year for which accounts are available. Vodafone Espana paid 43 million euros in interest to group companies in that year.
Accounts for the holding company for the Italian operations do not break down interest payments between affiliated and non-affiliated companies but do not show any significant rise in overall interest payments since 2007.
The other main reason behind Vodafone Limited's swing to reported losses was an increase in the price its UK unit pays for the mobile phones and connection services it sells on to consumers. In 2002-2004, the 'costs of goods sold' represented around 55 percent of turnover.
In the past three years, reported costs of goods sold have averaged 76 percent of turnover, squeezing Vodafone's income.
Vodafone said in an emailed statement that the "extremely competitive commercial environment in the UK" had affected margins.
A narrowing gap between revenues and cost of goods sold can reflect increased competition, whereby companies struggle to pass on cost increases to consumers via higher prices.
However, transcripts of conference calls with analysts, that CEO Colao or Chief Financial Officer Andy Halford host each quarter on the release of earnings (http://www.reuters.com/finance/earnings) results shows the company has warned for several years that its margins across all European markets were under constant pressure.
The UK was not singled out as a market that suffered an exceptional increase in margin pressure.
In Germany, where Vodafone says call costs are at the European average or below, the cost of goods sold has not risen dramatically as a percentage of turnover, and averaged 57 percent in the two most recent years for which accounts are available.
"This suggests there is some very odd pricing going on into Vodafone UK," tax campaigner Richard Murphy said.
At Spanish group Telefonica's UK division, O2, cost of goods sold has remained constant at around 58 percent in financial statements for 2007 to 2010, the last four years for which accounts are available.
This allowed O2 to generate profits of 788 million pounds in 2010, on which it paid tax of 189 million pounds.
Had Vodafone's cost of goods sold in the UK since 2003 averaged the same level as the German unit experienced in recent years, the unit's profits could have been 4.7 billion pounds higher, and it could have incurred an additional 1.4 billion pounds in tax, according to Reuters calculations based on the company accounts.
By massaging the prices group companies charge each other for goods and services, multinationals can shift profits from high-tax to low-tax jurisdictions.
This technique, known as "transfer pricing", typically involves a group company in a low-tax regime selling goods above market price to an affiliate in a higher tax regime.
Tax authorities around the world keep a sharp eye out for transfer pricing abuses, but it can be hard to spot.
Vodafone declined to say why costs of goods sold as a percentage of UK turnover rose so sharply.
It said the absence of a UK income tax charge for Vodafone Group in the year to March 2012, was due to high capital allowances and high external interest charges rather than transfer pricing adjustments.
It also cited the high cost of purchasing a UK 3G phone licence in 2000. UK profits were indeed hit by a depreciation charge on licences of 333 million pounds last year. However, in the profitable German unit, the charge was 519 million pounds.
At Vodafone Germany and Spain (http://www.reuters.com/places/spain), the lower cost of goods sold and absence of big inter-company interest payments explain their high profitability - and the high taxes paid in those countries.
Vodafone's German unit incurred corporate taxes of 3.14 billion euros from 2007 to 2011. Between 2008 and 2010, the Spanish unit paid almost 900 million euros. In 2011 alone, corporate income taxes payable by the holding company for the Italian unit were 721 million euros.
Vodafone Limited has racked up so many losses in recent years and its reported profitability has declined so much that it has even written off previously accrued tax losses, as it no longer expects to have enough future profits to absorb them.
Yet the ostensibly parlous state of the UK unit's finances is in sharp contrast to comments from the company to investors and analysts over the past few years.
The company's most recent annual report said the UK "performed well" last year.
"(Group) Service revenue declined by 0.4%, reflecting reductions in most markets offset by growth in Germany, the UK, the Netherlands and Turkey (http://www.reuters.com/places/turkey)," the report said.
In every quarterly analyst call bar one since May 2010, Colao and Halford have praised the UK as one of the group's stronger markets.
Another factor of which they regularly boast in these calls is Vodafone's proactive approach to managing its tax affairs.
In 2002 and 2003 the company paid an effective tax rate of 36 percent. It said it brought this down to 25 percent last year, a level it has told analysts it expects to maintain in the coming years.
This drop came about even before the UK began cutting corporate taxes, and rather reflects diligent planning.
"Without further tax planning ... over the next few years, the underlying adjusted effective tax rate will be in the mid-30s," then-Finance Director Ken Hydon told analysts in 2005.
Vodafone boosted its tax team in 2007 by hiring the head of the HMRC unit that dealt with large corporations, John Connors. Connors is now Vodafone's head of tax, according to its website.
Connors, Colao and Halford declined requests for interviews.
Around 2008, Vodafone even changed its top management bonus scheme to ensure that bosses would have a strong incentive for aggressive tax planning.
Payouts under the group's Global Long Term Incentive Plan (GLTI) are tied to the company's cash flow. However, large one-off payments to settle tax disputes are excluded from the cashflow measure used to compute the bonus.
This means that if the company doesn't pay taxes for years, cashflow is higher than it should be, facilitating a higher payout under the bonus scheme. But if the tax authority comes back and forces the company to pay back taxes, the payment doesn't diminish cashflow for bonus purposes.
HMRC has challenged Vodafone's tax planning in the courts. In 2010, the company agreed to pay the authority 1.25 billion pounds to settle a claim related to its 2000 takeover of Germany's Mannesmann, which later became Vodafone Deutschland.
The taxman viewed Vodafone's decision to structure the acquisition via Vodafone Investments Luxembourg S.a.r.l. (VIL) as a tax avoidance tactic, and sought to tax interest payments to VIL that were payable out of the profits of the German unit.
The settlement - which was criticised by the Public Accounts Committee last year for potentially costing the taxpayer millions of pounds - allowed Vodafone to continue to channel interest payments into Luxembourg.
Though this fact received little press attention at the time, Vodafone considered it a major coup.
"This agreement preserves the very significant benefits of our efficient Group tax structure, which we have benefited from for many years," CFO Halford said on a conference call to analysts at the time.
Multinational corporations pay most of their taxes in the individual countries where they have a bricks and mortar presence, tax experts say.
Hence, Vodafone's base in Berkshire, to the west of London, means Britain should enjoy a double dip into the company's earnings - on income from its UK phone business and from some overseas income not taxed at the local level.
But tax lawyers said the UK can suffer financially because of a willingness to allow structures that might be challenged as tax avoidance by overseas tax collectors.
"The German system is very rigid and constrained. There seems less appetite for tax planning and tax-efficient structuring in Germany than in the UK," said Ben Jones, tax lawyer at Eversheds. "InFrance (http://www.reuters.com/places/france) there is currently a greater capacity for the authorities to clamp down on structures they don't like," he added.
The system may be about to become even more conducive to tax avoidance.
Chancellor of the Exchequer George Osborne, who has said aggressive tax avoidance schemes are "morally repugnant", has published planned changes to the tax treatment of overseas subsidiaries that campaigners say will make it easier for big companies to shield profits from the tax man.
As part of a drive to attract more international businesses to set up headquarters in the UK, Osborne has broadened the definition of what could be construed as legitimate use of controlled foreign subsidiaries.
Campaigners including Murphy say this will make it harder for HMRC to challenge movements of cash to low tax jurisdictions.
The Treasury has estimated the measures could cost the Exchequer 805 million pounds a year by 2016, according to documents on the HMRC website.
Osborne hopes any direct revenue hit will be outweighed by increased job creation.
But Vodafone's experience challenges the link between tax rates and jobs.
Despite the UK's low headline corporate tax rate and the absence of actual tax charges on Vodafone's activities here, the mobile phone giant has cut jobs here by 23 percent since 2007, while increasing employment by 21 percent in Germany, where corporate taxes are over 30 percent.
Also Vodafone's investment in Germany has risen 34 percent since 2007, against 11 percent in the UK.
The UK's relaxing of tax rules is at odds with moves overseas, and Vodafone is feeling the heat. It faces a major tax challenge from the Indian government and believes rising fiscal deficits internationally could spell trouble.
"The temptation of taxation that some governments, if not all governments, are feeling these days - this is really what I would put under the number one cloud (Vodafone faces)," CEO Colao said last month.