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Tax protestors 'close' Vodafone shop

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There is ‘no question’ of Vodafone having an outstanding tax liability of £6 billion, HMRC has said after protestors were reported to have closed a Vodafone store in London's Oxford Street.

‘We cannot comment on the detail of [HMRC’s recent settlement with the company] but we can confirm that it was reached by HMRC following a rigorous examination of the facts and an intensive process of negotiation that tested the arguments of both parties,’ an HMRC spokesman told Tax Journal.

‘As a result it was agreed that Vodafone’s liability was £1.25 billion and at no point was a liability greater than that established,’ he added. The £6 billion figure was, he said, ‘an urban myth’.

Sky News reported that Vodafone said the shop ‘will remain shut until it is safe to open it again’. Activists had 'claimed that the mobile phone giant had dodged a £6 billion tax bill’.

A Vodafone spokesman told Tax Journal that under the terms of an agreement with HMRC earlier this year, Vodafone will pay £1.25 billion to settle a case concerning the controlled foreign companies rules.

The case was agreed ‘after a full and rigorous examination of the facts and circumstances by HMRC, followed by intensive and tough negotiations about the complex legal issues involved’.

He added: ‘It is incorrect to suggest that there was outstanding tax bill of £6 billion, as this was never the case.’

‘Vodafone takes corporate responsibility very seriously and in that regard does meet its tax obligations in the countries in which it operates,’ he said.