The huge profits amassed by Vodafone should have been viewed as a problem by Labour. We should have been concerned. But of course a New Labour principle was that we were 'okay with the filthy rich'. This principle led to a policy of Low Taxation. Tories reading will more readily recognize these as Tory principles in operation, not Labour ones. There was most clearly a detachment from core Labour values in pursuing this principle.

For the love of God, will someone please nail the facts to a baseball bat and then use it to bludgeon Eoin about the head until he accepts some basic facts about Vodafone.

Vodafone doesn't earn all of its "huge profits" in the UK.

Therefore it's totally right and proper that it doesn't pay tax on all of its "huge profits" in the UK.

Got me so far?

The dispute between HMRC and Vodafone hinged on whether certain profits earned outside the UK should be taxed as if they had been earned in the UK under the UK's controlled foreign companies legislation. That legislation sails pretty close to the wind with respect to EC law and has needed clarification as to its scope. You can't realisitically expect Vodafone to pay UK tax on its overseas profits without also foregoing UK tax on profits earned here by foreign companies.

But this isn't about some concerted campaign to reduce tax on the "filthy rich". It's about taxing in the UK only those profits that are earned in the UK.

Let's hope that Eoin has made a New Year's Resolution to think before he blogs.

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Filed under: Other blogs, Taxation with tags controlled foreign companies, eoin clarke, eoinomics, hmrc, idiots, tax avoidance, vodafone