Vodafone Paid No UK Corporation Tax in 2013 Despite £294m Profit

Vodafone did not pay any corporation tax in the UK in 2013 despite making millions of pounds in profit but management has insisted it made contributions to the economy elsewhere which justified closing its wallet to the taxman.

In the year to 31 March, Vodafone's UK operating profit tumbled 27% to £294m. It generated £5bn of revenues in the UK alone.

The firm, which was at the centre of an HMRC "sweetheart deal" furore over an alleged £6bn unpaid tab, said it paid no UK corporation tax because it had already made contributions to the struggling economy.

"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 Vodafone spokesman told Sky News.

Vodafone said it had stumped up £300m in interest in 2012 on loans to pay for its 2000 purchase of the 3G spectrum. It has also forked out more than £800m in the recent 4G spectrum auction by the government.

The firm, which said it is only obliged to pay the tax the law requires it to, also paid no corporation tax in the year before. It handed over £141m to HMRC in the 2010/11 tax year.

Around the world, Vodafone made £44.4bn in revenues, a 4.2% decline and the first drop for seven years. It made £4.73bn in operating profit after paying £2.8bn in taxes worldwide.

In the UK, controversy surrounds the tax affairs of a number of multinationals such as Google, Amazon and Starbucks, who pay little or no tax to HMRC despite turning over huge revenues.

Some are accused of exporting UK profits abroad to low-tax jurisdictions to bring down their tax burden.

While most comply with the tax laws, there is a perception of injustice among many in the public who are suffering a real cut in income and dwindling public services amid government spending cuts.