Vodafone pays no Corporation Tax in the UK for the SECOND time!

Vodafone paid £2.6bn in tax to other nations last year – but UK tax breaks mean British bill is minimised.

For the second year running, the mobile phone company has avoided paying corporation tax by benefiting from the tax breaks in the UK.

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With revenues of nearly £45 billion 2012, Vodafone reported underlying earnings of £13 billion, and a global profit of more than £3 billion. The business generated more than £5 billion in revenues in the UK, and £1.2billion in underlying earnings.

The company shelled out around £2.6bn in tax to other nations last year, but its UK corporation tax bill was zero. 
According to it's report, however, Vodafone paid £24 million in respect of tax 
recalculated for previous years.

UK levies are minimal at Vodafone because the company is allowed tax breaks on the cash it invests in buying spectrum and in network equipment, and on the £300m a year in interest its UK operating company still pays on money raised to buy spectrum at the 3G airwaves auction in 2000.

Vodafone's tax payments are lower than the cash it distributes in dividends. In the last year, shareholders benefited from a 13% rise in the stock price and £4.8 billion in dividends. The company is cash rich thanks to money collected from Verizon Wireless, America's largest mobile network, in which Vodafone holds a 45% stake. Speculation that Vodafone would be tempted to offload the stake has helped boost demand for its shares.

In light of the economic crisis in Europe, which has taken its toll on Vodafone's revenues there, the pay of Vittorio Colao, chief executive, is to be frozen for a second consecutive year, along with that of most of his top team.

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"When considering what, if any, pay increases to award, the committee is always mindful of both wider conditions as well as what is happening elsewhere within Vodafone," Luc Vandevelde, remuneration committee chairman, wrote in the annual report.

A collapse in consumer confidence has made trading tough for Vodafone in the eurozone. In southern Europe, revenues fell by 11%, and operating profits by 28%. In the past year, Vodafone has slashed the book value of its Italian and Spanish businesses by a combined £7.7 billion.