I found an iPhone 4S and want to take it back

Well, yesterday I found an iphone 4s and like an idiot I broke the sim card and restored the phone (I was going to take it back but there was the passcode). After reading a lot of threads, it seems like I might get in trouble when I get a new sim and put it in.

I live in the UK, and the phone had Vodafone simcard.

So my question is, what to do next? I do not want to take it to the police, and I thought I should take it to Vodafone and tell them I found it like that, so they can track the owner. Is that a good idea? Or I will get in even more trouble?

Any Ideas would be helpful.

If you have found a phone I would take it to the police, they may be able to trace the owner when it is reported as lost/stolen. I can't see why you would get into trouble by handing a phone in that you found.

The phone is of no use to you.
When a phone is reported as lost or stolen to a network and its IMEI (serial) number is blocked. This makes the phone unusable across all networks with any SIM card. The only way to unbar a phone is for the original owner who originally asked it to be barred to contact the network asking for it to be reactivated - this would happen if the phone was lost and then found again for example.
Unless the original owner of the phone asks for it to be unbarred, it can't be unbarred. It is permanently barred across all networks with all SIMs.