'No UK tax on £84bn deal is good for Newbury,' says Richard Benyon

The firm, which has its UK headquarters in Shaw, confirmed on Monday that it had sold its 45 per cent stake in Verizon Wireless to US telecoms group Verizon Communications, in a deal worth £84bn.
In a release on its website, Vodafone confirmed that it did not have to pay UK tax as its US stake is owned by a holding company based in the Netherlands.
However, even if the US shareholding were held in the UK, Vodafone would not be liable to pay tax on gains under the substantial shareholders exemption law introduced by Gordon Brown in 2002.
The deal has faced strong criticism from the public accounts committee – responsible for overseeing government expenditure – which has called for an urgent review of the rules.
However, Mr Benyon says Vodafone is acting within the current guidelines and insists that the deal is a good thing for Britain.
“Vodafone pays a lot of taxes and I am not going to criticise a great British company which
clearly operates within the current laws and brings prosperity throughout Newbury and West Berkshire,” he said. “The UK benefits massively from this and other Vodafone deals.
"This will see a huge amount of money flowing into Britain and our 4G mobile infrastructure, which can only be a good thing.
“We are constantly working to close down legal loopholes, which is something we have been doing for some time.”
However, the head of the public accounts committee, Margaret Hodge, said: “HMRC must begin an absolutely thorough investigation to make sure that UK taxpayers receive the maximum to which they are entitled.
“Treasury ministers should also examine whether there is a loophole being exploited by the British company.
"If there is a flaw in the law, it needs to be addressed by treasury ministers urgently."”
It is not the first time the firm has been embroiled in controversy over the handling of its tax affairs.
In October 2010, protesters gathered outside several Vodafone stores around the country and the company was again criticised by the public accounts committee for allegedly avoiding a reported £6.75bn of tax after its takeover of Germany’s Mannesmann company in 2000.
The Verizon deal also reopened the debate of how multinational corporations handle their taxes, with the likes of Google, Amazon, Starbucks and Thames Water recently coming under fire for alleged tax avoidance.
The Liberal Democrat’s prospective parliamentary candidate for Newbury, Judith Bunting, said: “Vodafone has been accused of playing the system to avoid paying its taxes. I really hope that’s not the case.
"But the accusation does rather beg the question, why hasn’t [Chancellor] George Osborne reversed the substantial shareholder exemption?
“International companies accept the benefits of the social system in which they run their operations and they should be happy to contribute to that system.”
Vodafone plans to return around £54bn of the money to its shareholders, with an estimated £22bn of that total likely to go to UK shareholders, who will be responsible for paying tax on their returns.
The company will also set aside £6bn to launch Project Spring, an investment plan that will accelerate 4G networks and allow it to offer customers a faster broadband service.
The project will also see a rise in the number of Vodafone high street stores.
The Verizon deal, which was announced after the close of trading on the London Stock Exchange, saw shares in the company rise to their highest level in 11 years.
The company is due to pay an estimated £3.2bn in US tax.