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London protests over Vodafone's £6bn tax dodge

Mobile operator Vodafone was forced to close its flagship Oxford Street store this afternoon after the premises were picketed by protesters angry that the firm has been let off a £6 billion tax bill.

Campaigners paraded outside the store with banners labelling the company 'tax dodgers' and telling Vodafone: 'Pay your taxes, save our welfare state'.

Demonstrators gathered to protest at Vodafone being granted a £6 billion tax waiver at the same time as chancellor George Osborne claimed that £7 billion cuts to the benefits system were "necessary".

Organisers used Twitter to upload pictures of the demo as it happened, spreading word of the demonstration.

HM Revenue & Customs made the decision last month to allow the telco to shirk off its tax liabilities on vast profits racked up by a subsidiary based in Luxembourg, where its profits would be taxed at just one per cent.

The case dates back to 1999, when Vodafone attempted to route the €180 billion purchase of German engineering firm Mannesmann via Luxembourg to avoid tax.

Unfortunately for Vodafone, it was ruled that the deal broke anti-tax avoidance rules.

Controversy broke out earlier this year when the head of HMRC, David Hartnett, withdrew lawyers from the case and appointed a negotiating team, which let the firm off with a £800 million lump sum and a further £450 million over five years.

This isn't the first time massive tax avoidance by IT firms has hit the headlines in recent days. At the end of last week, it was revealed that search giant Google had avoided $3 billion in taxes over the last three years, paying an average 2.4 per cent on non-US earnings.