Vodafone settles £1.25bn in CFC tax case

The telecoms operator has ended a ten year dispute with HMRC by agreeing to pay back £1.25bn over five years.

The case relates to tax payable by Vodafone’s Luxembourg subsidiary and follows tightened CFC rules brought in by the previous Labour government to prevent companies shifting income away from the UK to foreign subsidiaries with a lower tax rate.

Vodafone had set aside £2.2bn in its books to meet the potential cost of the claim.

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