Business

Vodafone pays no UK corporation tax once again

Vodafone sign
Vodafone says it wants to change the nature of the tax debate

Vodafone, the world's second largest mobile phone firm, paid no UK corporation tax for a second year running in 2012.

Vodafone said UK network investment and interest payments wiped out corporation tax liabilities for the year to April.

It said operating profits of £294m in 2012 were offset by interest payments of £300m on loans to buy 3G spectrum.

Vodafone's annual report also revealed chief executive Vittorio Colao was paid some £11m.

The company said it was committed to "integrity in all tax matters" and that it paid £882m in other UK taxes and contributions during the year.

Vodafone said the UK contributed just 2.5% to its overall profits.

"We believe the UK tax debate should be wider than just merely looking at corporation tax, because different industries make their - in our case significant - contributions in a variety of ways," a company spokesman said.

There is currently a high profile debate in the UK around corporate taxation, with Google, Starbucks and others being criticised for the small amount of corporation tax paid in the UK.

The company could be about to secure a huge windfall if a much-mooted sale in the US goes ahead.

Vodafone owns 45% of Verizon Wireless, a highly profitable US mobile network. The rest belonging to Verizon Communications, which would like to own the whole company.

Anticipation has been rife in recent months that the deal is about to go through, and the share prices of both companies have leapt in anticipation.

Verizon has named a buying price of $100bn (£65bn), but some analysts have estimated that Verizon will probably need to pay between $135bn and $140bn to make Vodafone sell.

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