- Only Swiss employee is part-time bookkeeper
- Vodafone takes up just 5% of his time
- Office rarely used; orders come from Luxembourg
An undercover sting has exposed Vodafone’s operation in Switzerland as a sham designed to avoid tax. While the telecoms giant contrives to have an “office”, this is rarely occupied — with their affairs in the country being run by a single part-time bookkeeper.
Undercover reporters from the Bureau of Investigative Journalism and Private Eye filmed a Swiss manager spilling the beans on the firm’s operations in Switzerland, casting further doubt on the legitimacy of Vodafone’s already suspect tax affairs.
One of Vodafone’s companies with profits of £1.6bn was taxed less than 1% in 2011 — by using a legal avoidance technique in which a Vodafone subsidiary in Luxembourg attributes profits to a Swiss branch. However the company does not own its own mobile network in the country.
The accountant told undercover reporters:
“We just do the bookkeeping… Vodafone is 5%, or not even 5% of my time … Once a year they come here, once or twice a year I go to Luxembourg”
Vodafone caused outrage in 2010 when it paid just £1.25bn tax in a “sweetheart deal” with HMRC, when it was widely believed that they owed £6bn. This saw them targeted by the activist group UK Uncut, and the government make a much-criticised pledge to crack down on tax avoidance.
Vodafone could relocate their “Swiss operation” to the interior of a cuckoo clock.