Vodafone denies ‘sweetheart’ deal as HMRC lawyer takes oath

Vodafone, Britain’s biggest mobile phone company denied any "sweetheart" deal with HMRC (HM Revenue & Customs) in a reported multi-billion tax bill. The company was accused of settling a tax dispute by paying just £1.25 billion last year as the actual amount is still not clear.

The HMRC top lawyer Anthony Inglese was forced to swear an oath on the Bible in the parliament on Tuesday as part of the inquiry into the Vodafone tax deal.

Earlier HM Revenue & Customs was accused of letting Vodafone settle the dispute with a much lesser amount, while the actual loss to the taxpayers was seen as high as £8 billion by some MPs. So far, HMRC has not the revealed the actual loss, putting the amount to speculation.

“We are looking at potentially £8 billion of tax lost. We’re looking at a company that was given five years to pay even though it was sitting on a cash pile,” said Stephen Barclay, an MP on the public accounts committee on Tuesday, reports The Telegraph.

However, Vodafone has termed the allegations “unfounded” and said it considers it as a “good corporate citizen.” The company denied receiving any tax liability of £6 billion or £8 billion and reiterated that it does not have a tax liability in the U.K.

"There has not now and never has been a tax bill for £6bn or £8bn... There was no sweetheart deal. The company pays about 25 per cent of its annual profits in tax which is a normal corporate deal," said Andy Halford, the group's chief financial officer.

Vodafone raised its full year forecasts on Tuesday driven by strong growth in the emerging markets and write down in its Greek operations. The mobile giant took a £450 million write down in its Greek operations in the current period and an £800 million for the same period, last year.

The company reported a half yearly net profit of £6.6 billion as against £7.54 billion for the same period, previous year, which includes £4.3 billion revenue from the sale of its minority shareholding in China Mobile.

The company plans to transfer £2.8 billion as special dividend which equals to 4 pence a share. This tops up a 7 percent dividend it had declared for the shareholders and comes from its 45 percent stake in the U.S. mobile operator Verizon Wireless.