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The dodgy house of Vodafone

In this guest blog Richard Brooks, author of The Great Tax Robbery, explains why Vodafone’s tax dodge is still so scandalous.

Vodafone epitomises 21st century international corporate tax avoidance.

When the company took over German engineering company Mannesmann in 2000, it structured the deal using a Luxembourg holding company and twice as much internal debt than the whole group had really borrowed. This financial alchemy enabled it to funnel billions of pounds of otherwise taxable profit as interest payments from Mannesmann and other European operations into a Luxembourg company taxed at less than 1%. With tax dodging shaping the business, Luxembourg became (on paper) Vodafone’s most profitable territory without selling a single phone contract.

Under British tax law at the time, the profits of a UK multinational diverted into a tax haven would have been taxed in the UK. Indeed, the Labour government had not long before enacted specific legislation to ensure that the arrangement Vodafone proposed was caught. But after unsuccessfully lobbying for a concession, the company went ahead anyway and argued that European law (never intended to facilitate tax avoidance) overrode UK law.

A decade long legal battle ensued, during which time Vodafone repeated the trick with its investment in US firm Verizon, through another Luxembourg company. Despite holding the upper hand after a 2009 Court of Appeal ruling that Britain’s tax law could be compatible with European law, HM Revenue and Customs boss Dave Hartnett struck a deal with Vodafone and its adviser David Cruickshank (the chairman of Deloitte with whom Hartnett personally negotiated many big cases and who would soon become his employer!) The company would pay just £800m tax and a further £450m over five years (a time-to-pay arrangement that ordinary taxpayers would never be allowed) and have a free pass for the future. At the time I estimated the deal was worth around £6bn to Vodafone, but since this excluded the US transaction that was diverting around $2.5bn a year profits into Luxembourg yearly from 2006, it looks like an under-estimate.

 Multinationals don’t like working this hard for their tax breaks and, while the Vodafone legal wrangle went on, they had set about persuading the government to change the law so that schemes like Vodafone’s automatically work. In 2010 George Osborne’s Treasury created a series of working groups to propose new rules, including one to address offshore financial schemes like those used by Vodafone to shift profits into tax havens. On it sat… Vodafone’s tax director (and former senior HMRC official) John Connors. The group duly produced just what Vodafone wanted and George Osborne obligingly enacted the changes in his 2012 finance bill.

 In an unguarded conversation with City analysts in 2010 Vodafone’s finance director confided that “a reasonable proportion of the group’s free cash flow [around £6bn a year] obviously does come from the tax efficient structuring”. The phenomenal size of the advantage became clear recently when the company brought onto its balance sheet a “tax asset” of £17.4bn. This represents the reduction in future tax bills (over twice the UK’s annual aid budget) that Vodafone will enjoy by diverting profits from around the world into Luxembourg thanks to Britain’s emasculated corporate tax law.

So Vodafone first defied British tax law, then negotiated an escape from its full effect, then helped change the law so its schemes would never be caught again. The result is tens of billions of pounds kept from government budgets. Or, in language the tax accountants wouldn’t understand, millions of people deprived of the education, healthcare and benefits they deserve.

 That’s something worth protesting about.

Join our action VodaHome on 14th June – See you on the Streets!!


Press release: UK Uncut return to Vodafone

EMBARGOED UNTIL 00.01 Thursday 15 May 2014

Tel 07415 063 231
Email ukuncut@gmail.com

UK UNCUT TO TARGET VODAFONE’S TAX DODGING IN NEW WAVE OF ANTI-CUTS PROTEST

– Announcement follows wide anger at news of Gary Barlow’s tax dodge
– Campaign group expects hundreds to take action against mobile company in June.

Anti-austerity direct action group UK Uncut[1] has today announced that it will make Vodafone the target of a “national day of action” in protest against their tax dodging activities. The campaign group claims that the mobile phone provider “hasn’t paid a penny of corporation tax since 2011”,[2] and that forcing tax avoiders to pay their tax could avert a looming housing crisis in the UK.

Tax avoidance shot back into the headlines this week after a tribunal ruled that former Take That star Gary Barlow should pay back millions of pounds gained from investing in an aggressive tax avoidance scheme.[3] UK Uncut campaigners have laid responsibility with the government. The group says pledges from David Cameron and George Osborne to crack down on tax avoidance by large companies have proven to be “empty words”.

The protests are planned to take place on June 14th and will focus on how tax dodging is crippling the UK’s social housing sector. A statement on UK Uncut’s website said they will “transform Vodafone branches up and down the country into living rooms, shelters, refuges, bedrooms and hostels”.[4] The group say they expect dozens of stores around the UK to be affected. The announcement comes as official statistics on housebuilding are expected to show the supply of homes continue lag behind demand,[5] and as news emerges that hostels are turning away the homeless due to a lack of available accommodation.[6]

Vodafone was the first company to be targeted by a series of high-profile protests by UK Uncut for avoiding a £6bn tax bill in 2010.[7] The action is due to take place just six weeks before Vodafone’s AGM and less than a year before the general election in which the government’s record on tackling tax avoidance while slashing public spending will be centre stage.

UK Uncut supporter Uma Dagenheart, 23, said: “It’s outrageous that after four years of the public demanding action, the government has done nothing to make giants like Vodafone – or millionaires like Barlow – pay their tax. We are suffering from a housing crisis in this country and the tax that Vodafone owes could pay for thousands of new homes.”

Tara Jackson, 28, who will be taking place in the protest said “The government were lying when they said they were serious about making rich companies pay their fair share. It’s time we reminded the government how angry people are that their mates in the City can get away with multi-billion pound tax bills while the rest of us suffer.”

ENDS

Notes for editors

[1] www.ukuncut.org – UK Uncut became known four years ago for a series of high-profile protests against tax-dodging companies including Vodafone.

[2] Tax expert Richard Murphy has produced evidence on Vodafone’s ongoing tax dodge:

http://www.taxresearch.org.uk/Blog/2012/06/11/vodafones-not-paying-any-tax-in-the-uk-get-used-to-it-because-thats-what-george-planned/

http://www.theguardian.com/commentisfree/2010/oct/22/vodafone-tax-case-leaves-sour-taste

[3] http://www.bbc.co.uk/news/uk-27356896

[4] The announcement will be published on Thursday, May 15 at www.ukuncut.org

[5] Housebuilding statistics will be made available at https://www.gov.uk/government/organisations/department-for-communities-and-local-government/about/statistics. The numbers of affordable homes and new homes in the social rented sector have fallen sharply in recent years. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/259999/Affordable_Housing_Supply_2012-13.pdf

[6] http://www.theguardian.com/housing-network/2014/may/06/affordable-housing-shortage-homeless-hostels

[7] http://www.theguardian.com/money/2011/dec/06/hmrc-tax-deal-vodafone


CALL OUT: #VodaHome

We’ve had enough of Osborne and his fat cat cabinet sheltering tax-dodging companies like Vodafone yet failing to offer good quality, affordable housing to millions of people. Join us on June 14 when we’ll transform Vodafone stores across the country into the homes we all need and deserve!

We are in the midst of a national housing crisis caused by cuts to housing benefits, the bedroom tax, a lack of housing for disabled people, social cleansing of our cities and soaring rents. Evictions and homelessness have risen, while providers of services for the homeless have been cut.

The government says we can’t afford to fund social housing and benefits but Vodafone has not paid a penny of corporation tax since 2011. On June 14 – ahead of Vodafone’s AGM – UK Uncut will be going back to Vodafone to remind them if the Government won’t make them pay their tax then we will.
So gather your friends and family as we transform branches up and down the country into living rooms, shelters, refuges, bedrooms and hostels. We will show that we are here to keep the pressure up on tax avoiding millionaires, and that empty words from Cameron’s Government won’t stop us.

If you’re angry about unaffordable rents, the bedroom tax, housing benefit cuts, social cleansing, empty houses and millions being left without safe and secure homes, then take action! If it makes you sick that Vodafone can get away with not paying tax, then take action! If you say NO to the government sheltering tax-dodging companies and YES to safe, affordable, secure homes for all then take action!


So grab your sleeping bags, lamps, chairs, rugs, mates, toys and turn your nearest Vodafone into a home. Check the actions page to find an action near you. If there isn’t one, why not start one off? We’ve got a step-by-step guide on how you can organise one yourself. UK Uncut actions are creative and fun. If you need any help get in touch on ukuncut@gmail.com – we need to make sure the Government and Vodafone hear us roar!

Power to us, power to you.

See you on the streets!


Press release: UK Uncut response to Gary Barlow tax story

Press Release, for immediate release:

In response to today’s revelations about Gary Barlow’s tax affairs, UK Uncut spokesperson, Kara Jackson, 28, said:

“Today’s news that Gary Barlow has been getting away with dodging millions in tax is another example of how the rich think it’s one rule for them and another for the rest of us. Millionaires and corporations are being let off the hook – yesterday it was revealed that Amazon is still paying way less than what it should.

It only takes a minute for the government to get real about the rich paying their tax. Every new story about another OBE, multinational or Tory millionaire not paying their share makes more of a mockery of the governments claims that were “all in this together”. People are angry at this injustice and we’ll be keeping up the pressure on tax dodgers this summer.”

Ends

For media enquiries: 07415 063 231


Press release: Direct Action groups to target Npower over fuel poverty deaths

For Immediate Release
Contact:07415 063 231 / 07586 482 157
fuelpovertyaction.org.uk ukuncut.org/ dpac.uk.net

• Over a thousand people will take action against Npower and other Big Six energy companies on day that Winter Death statistics are released

• Anti-austerity groups including Fuel Poverty Action, UK Uncut, Disabled People Against Cuts, and the Greater London Pensioners Association reveal Npower as key target (Npower Supply and Trading Offices, 60 Threadneedle Street, EC2R 8HP)

• Further protests to take place in Oxford, Lewes, and Bristol

Acting together under the banner of ‘Bring down the Big Six – Fuel Poverty Kills!’ direct action groups will hold ‘an outrageous, creative and inclusive’ protest at the London office of the German energy giant Npower on Tuesday November 26th midday.

Meeting at 11.30am at Royal Exchange by Bank tube station, hundreds will march on Npower to protest against winter deaths, price hikes and their devastation on the planet. Simultaneously, Oxford-based protesters will target British Gas at their new Oxford HQ . (1) So far over 1000 people have pledged to take part in the protests so far. (2) At least 7,200 people died last year in the UK due to cold homes. (3)

Npower is the UK’s most complained about energy company. It received 202 complaints per 100,000 customers between April and June – double that of it’s nearest rival EDF (4) as well as increasing its’ prices higher than any of the other Big Six this year (9.3% electricity and 11.1% for Gas) The company has also defended seeking a 5% profit margin which is widely regarded as excessive (5)

Npower have also paid zero corporation tax for the past 3 years despite reporting a 34% profit rise of £413million last winter due to price hikes as an estimated 300,000 people were pushed into fuel poverty. (6)

Sarah Price of UK Uncut said: ‘The Big Six are an example of incredible corporate greed. Huge profits are extracted from the public whilst they suffer at the hands of austerity. David Cameron and his cabinet of millionaires are only too happy to stuff the pockets of big business while ordinary people are left out in the cold. The combined wealth of cabinet ministers is £70 million and they will never feel the pain of those who can’t afford their energy bills this winter. People must be put before profit, and with creative direct action, we will stand with the elderly, the poor and vulnerable to fight for OUR power. Fuel Poverty must end.’

Joseph Murphy of Disabled People Against Cuts said: ‘Another harsh winter will mean more disabled people will find themselves isolated in their homes, unable to heat them, or cook properly. Many don’t make it through. Politicians and energy firms talk about ‘measures’ and ‘support’, which are only available to a very few. The energy firms continue to sit in government departments writing energy policy, in buildings where the heating is paid for by the very people who will die of cold this winter. This is a disgrace. We ask all disabled people to take action, and to show this government, and these companies, that we wont take this and will fightback’.

Ends

CONTACT

Fuel Poverty Action – 07586 482 157 fuelpovertyaction@gmail.com

UK Uncut – 07415 063 231 ukuncut@gmail.com

Disabled People Against Cuts 07508 983 610

Greater London Pensioners Association 020 7209 3084

1 www.facebook.com/events/1415841395313806

2 facebook.com/events/364663353679232 this number does not include those who have pledged to come but do not use social media

3 Last year there were 24,000 excess winter deaths in England and Wales. According to the World
Health Organisation around 30% of excess winter deaths can be attributed to cold indoor
temperatures – which based on current figures means around 7,200 people died last year due to
cold housing in the winter months. Source:http://www.euro.who.int/__data/assets/pdf_file/0003/142077/e95004.pdf

4 metro.co.uk/2013/11/19/npower-most-comp…

5 www.mirror.co.uk/news/uk-news/npower-mi…

6 telegraph.co.uk/finance/personalfin…

7 metro.co.uk/2013/10/21/npower-boss-tell…

8 telegraph.co.uk/finance/newsbysecto…

9 theguardian.com/money/2013/nov/03/e…

10 telegraph.co.uk/finance/personalfin…


CALL OUT: Bring down the #Big6

Bring down the Big 6! Fuel Poverty Kills!

Join Fuel Poverty Action, UK Uncut, Greater London Pensioners’ Association and Disabled People Against Cuts for an audacious, creative and inclusive protest against fuel poverty deaths on November 26th at 11.30am in Central London.

Meeting point: Royal Exchange by Bank underground station.

On November 26th, the number of people who died last winter because they couldn’t afford to heat their homes will be announced. It is an outrage and a disgrace that anyone in 21st century Britain could die from fuel poverty. 

We won’t stand for any more unnecessary deaths caused by price-hiking, planet-ruining, profit-munching, tax-avoiding energy companies. So join us as we take to the streets in Central London to target one of the main criminals of the energy industry.

As the Big Six energy companies hike up prices we are told the only answer is to put on a jumper. As millions will be forced to live in fuel poverty this winter, families will have to choose between heating or eating. 

But we know what we want- we want warm pensioners and a publicly-owned, tax paying, renewable energy system that isn’t wrecking peoples lives or our planet.

So join the fight back and reclaim the power. Gather your kids, neighbours, grandparents your warmest jumper and your latest energy bill.

See you on the streets.

Sign up for the event here… https://www.facebook.com/events/364663353679232/

Keep up to date with the latest on the action, including the secret location by following @fuelpovaction // @ukuncut // @Dis_PPL_Protest. 

And if you’re a grassroots organisation and would like to add your name in support of the action please email: infofuelpovertyaction.org.uk.


Press release: Roads blocked in 7 towns and cities for Roadblocks for Justice action

FOR IMMEDIATE RELEASE

ukuncut@gmail.com | 07415 063 231 | @ukuncut

Central London and 6 other town centres brought to standstill in mass civil disobedience across UK

LINK to free photos here: https://www.facebook.com/media/set/?set=a.570215963026336.1073741832.141516115896325&type=3

Roadblock protests have started in 7 towns and cities all over the UK with the protestors bringing central London’s Fleet Street to a standstill in opposition to the government’s proposed changes to legal aid.

The central London action outside the Royal Courts of Justice have brought Fleet Street and the surrounding areas to a stand still. Protestors say they know the actions will be disruptive, but that they are a necessary and proportional response to the government’s plans to block access to the courts for millions of ordinary people by making justice unaffordable.

The government’s reforms have come under increasing criticism, with England’s most senior family judge recently describing them as ‘disconcerting’ and suggesting that ‘something needs to be done’ [1]. In July, the government was forced to backtrack on a key part of the reforms, that of removing the right of legal aid defendants to choose their solicitor, following protests [2].

Protestors will block roads in seven towns and cities across the UK: London, Manchester, Liverpool, Cambridge, Hull, Northampton and Norwich. In London, protesters will meet at the Old Bailey at 11.30am, and during the roadblock will put the Justice Secretary, Chris Grayling, on trial for ‘perverting the course of justice’. The protesters have organised bands, poetry and know your rights workshops to take place during the road block.

The government claims that changes will improve efficiency in the legal system and that the UK has one of the most expensive legal aid systems in the world [3], but this claim has been challenged by research showing that the estimated £6m savings will be dwarfed by £30m in knock-on costs [4].

Anna Davidson, UK Uncut spokesperson said: “The government is making a political choice to cut legal aid to stop charities and individuals challenging their austerity agenda and its impacts in the courts. The government is lying when it says the legal aid changes are about saving money because their plans will cost more than they save.

“The government is making ordinary people pay the price of the economic crisis by stopping ordinary people accessing free legal advice and representation. Legal aid helps people keep their homes when social services is trying to evict them because of the bedroom tax, or sue the government over wrongful arrest or kettling, or disabled people access the services they need.”

Jack Genel, UK Uncut supporter said: “We are all here today to show our resistance and anger at these unnecessary legal aid plans. We know that we are causing inconvenience, but we are following in the footsteps of many, including the Suffragettes and civil rights groups, in creative civil disobedience to challenge the government’s plans that will mean that only the rich can afford legal representation and advice.”

Lynn Jacobs, a UK uncut supporter said “I will be supporting this action because I have already seen the impact of legal aid changes. I fled an abusive relationship and was not sure what to do to protect myself. Because of the changes to legal aid I could not afford get a court order to protect myself from my ex-partner. I feel sad that the government does not want to help to protect me, and women like me, from violence. Why can’t the government make companies, like Google, pay their fair share instead of punishing people like me?”

The activists have enlisted the support of other direct action groups, including Disabled People Against the Cuts, Plane Stupid and Fuel Poverty Action [5, 6, 7].

ENDS

Notes to editors:

1 These comments were made in a recent court case and are recorded as part of the official transcript. See http://www.marilynstowe.co.uk/2013/08/23/family-division-president-says-legal-aid-cuts-disconcerting/

2 bbc.co.uk/news/uk-politics-23132233

3 consult.justice.gov.uk/digital-communic…

4 http://legalaidchanges.files.wordpress.com/2013/06/nick-armstrong-costing-the-civil-legal-aid-proposals-1306242.pdf

5 dpac.uk.net

6 planestupid.com

7 fuelpovertyaction.org.uk


UK Uncut
www.ukuncut.org
Twitter @ukuncut twitter.com/ukuncut
Facebook www.facebook.com/ukuncut


Press release: UK Uncut to blockade roads in mass civil disobedience across UK

For immediate release
ukuncut@gmail.com | 07415 063 231 | @ukuncut

UK Uncut to blockade roads in mass civil disobedience across UK

Roadblock protests announced by anti-cuts group UK Uncut will happen across the country today in opposition to the government’s proposed changes to legal aid.

The government’s reforms have come under increasing criticism, with England’s most senior family judge recently describing them as ‘disconcerting’ and suggesting that ‘something needs to be done’ [1]. In July, the government was forced to backtrack on a key part of the reforms, that of removing the right of legal aid defendants to choose their solicitor, following protests [2].

The protest group say their actions will be disruptive, but that they are a necessary and proportional response to the government’s plans to block access to the courts for millions of ordinary people by making justice unaffordable.

Protestors will block roads in seven towns and cities across the UK: London, Manchester, Liverpool, Cambridge, Hull, Northampton and Norwich. In London, protesters will meet at the Old Bailey at 11.30am, and during the roadblock will put the Justice Secretary, Chris Grayling, on trial for ‘perverting the course of justice’. The protesters have organised bands, poetry and know your rights workshops to take place during the road block.

The government claims that changes will improve efficiency in the legal system and that the UK has one of the most expensive legal aid systems in the world [3], but this claim has been challenged by research showing that the estimated £6m savings will be dwarfed by £30m in knock-on costs [4].

Anna Davidson, UK Uncut spokesperson said:
“The government is making a political choice to cut legal aid to stop charities and individuals challenging their austerity agenda and its impacts in the courts. The government is lying when it says the legal aid changes are about saving money because their plans will cost more than they save.

“The government is making ordinary people pay the price of the economic crisis by stopping ordinary people accessing free legal advice and representation. Legal aid helps people keep their homes when social services is trying to evict them because of the bedroom tax, or sue the government over wrongful arrest or kettling, or disabled people access the services they need.”

Jack Genel, UK Uncut supporter said:
“We are all here today to show our resistance and anger at these unnecessary legal aid plans. We know that we are causing inconvenience, but we are following in the footsteps of many, including the Suffragettes and civil rights groups, in creative civil disobedience to challenge the government’s plans that will mean that only the rich can afford legal representation and advice.”

Lynn Jacobs, a UK uncut supporter said “I will be supporting this action because I have already seen the impact of legal aid changes. I fled an abusive relationship and was not sure what to do to protect myself. Because of the changes to legal aid I could not afford get a court order to protect myself from my ex-partner. I feel sad that the government does not want to help to protect me, and women like me, from violence. Why can’t the government make companies, like Google, pay their fair share instead of punishing people like me?”

The activists have enlisted the support of other direct action groups, including Disabled People Against the Cuts, Plane Stupid and Fuel Poverty Action [5, 6, 7].

ENDS

Notes to editors:

1 These comments were made in a recent court case and are recorded as part of the official transcript. See http://www.marilynstowe.co.uk/2013/08/23/family-division-president-says-legal-aid-cuts-disconcerting/

2 bbc.co.uk/news/uk-politics-23132233

3 consult.justice.gov.uk/digital-communic…

4 http://legalaidchanges.files.wordpress.com/2013/06/nick-armstrong-costing-the-civil-legal-aid-proposals-1306242.pdf

5 dpac.uk.net

6 planestupid.com

7 fuelpovertyaction.org.uk


Press release: UK Uncut to blockade roads in mass civil disobedience across UK

For immediate release Friday 04 October 2013
ukuncut@gmail.com | 07415 063 231 | @ukuncut

UK Uncut to blockade roads in mass civil disobedience across UK

Anti-cuts direct action group UK Uncut have announced that roadblock protests will happen across the country tomorrow in opposition to the government’s proposed changes to legal aid.

The government’s reforms have come under increasing criticism, with England’s most senior family judge recently describing them as ‘disconcerting’ and suggesting that ‘something needs to be done’[1]. In July, the government was forced to backtrack on a key part of the reforms, that of removing the right of legal aid defendants to choose their solicitor, following protests [2].

The protest group say their actions will be disruptive but that the government intends to block access to the courts for millions of ordinary people by making justice unaffordable, and is a proportionate response.

Protestors will block roads in seven towns and cities across the UK: London, Manchester, Liverpool, Cambridge, Hull, Northampton and Norwich. In London, protestors will meet at the Old Bailey at 11.30am, and during the roadblock will put the Justice Secretary, Chris Grayling, on trial for ‘perverting the course of justice’. The protesters have organised bands, poetry and know your rights workshops to take place during the roadblock.

UK Uncut spokesperson Jim Thompson said: “The government’s proposals will destroy legal aid, blocking access to justice for all but the rich. We cannot allow this to happen. We know that our Roadblocks for Justice protests will be disruptive. We know that they will stop the traffic. But we also know that this kind of direct action works to make the government take notice. Rather than cutting free legal advice to prisoners, domestic violence victims and disabled people, they should be forcing Google to pay their fair share of tax.”

The government claims that changes will improve efficiency in the legal system and that the UK has one of the most expensive legal aid systems in the world [3], but this claim has been challenged by research showing that the estimated £6m savings will be dwarfed by £30m in knock-on costs [4].

Sarah Price of UK uncut said “The changes in legal aid are an assault on the poorest and most vulnerable in our society. By insisting on these so-called ‘cuts’ the government takes away our ability to challenge their decisions, allowing them to cut deeper and without legal challenge.”

Lynn Jacobs, a UK Uncut supporter said “I will be supporting this action because I have already seen the impact of legal aid changes. I fled an abusive relationship and was not sure what to do to protect myself. Because of the changes to legal aid I could not afford get a court order to protect myself from my ex-partner. I feel sad that the government does not want to help to protect me, and women like me, from violence. Why can’t the government make companies, like Google, pay their fair share instead of punishing people like me?”

The activists have enlisted the support of other direct action groups, including Disabled People Against the Cuts, Plane Stupid and Fuel Poverty Action [5, 6, 7].

ENDS

Notes to editors:

[1] These comments were made in a recent court case and are recorded as part of the official transcript. See http://www.marilynstowe.co.uk/2013/08/23/family-division-president-says-legal-aid-cuts-disconcerting

[2] www.bbc.co.uk/news/uk-politics-23132233

[3] https://consult.justice.gov.uk/digital-communications/transforming-legal-aid

[4] http://legalaidchanges.files.wordpress.com/2013/06/nick-armstrong-costing-the-civil-legal-aid-proposals-1306242.pdf

[5] http://dpac.uk.net/

[6] http://www.planestupid.com/ 

[7] http://fuelpovertyaction.org.uk/