Home / News / Software News / MPs Accuse Google of UK Tax Dodge

MPs Accuse Google of UK Tax Dodge

Gordon Kelly

by

MPs Accuse Google of UK Tax Dodge

Remember Google's motto of 'Don't be evil'? With no sense of irony, MPs are the latest to call this into question...

The Times reports the search giant has allegedly not paid any tax on its £1.6bn of advertising revenues in Britain last year. This occurred after Google diverted all earnings to its Irish subsidiary which denied the UK over £450m in corporation tax. Ireland has lower corporation tax rates of 10-25 per cent verses the 28-30 per cent in the UK.

Consequently Liberal Democrats deputy leader Vince Cable has rounded on Google demanding it "pay its fair share", stating: "Avoidance like this is hard to stomach at the best of times, but when the country is in recession and everyone is feeling the pain, it really sticks in the throat — it means higher taxes for the rest of us. Google’s reputation will be severely damaged if it continues to behave in this way. It is ducking its social responsibility.”

Labour MP Austin Mitchell has also jumped on the bandwagon declaring: "Google isn’t just sucking money out of local newspapers and other people who rely on advertising for a living — it’s also draining money out of the public finances. The search engine is a marvellous service, but the company is run by tax avoiders. If they are going to make so much money here they need to give more back to society."

Naturally enough Google is none too pleased with such claims, responding: "Google makes a big investment in the UK, with over 800 employees, and we make a substantial contribution to local and national taxation... we comply fully with the tax laws in all the countries in which we operate."

We'll wait for the authorities to make an official conclusion on this one, but on the surface of things it appears Google has been clever rather than unlawful. In which case there's another loop hole for you to close Gordon...

Link:

via The Times

MarkW

December 23, 2009, 11:46 pm

Many financial services companies have started doing this as well, it's not just Google. I used to work for a company that had a massive project to basically move their reporting centre to Ireland. This was from branches all across Europe, not just the UK.

Me

December 24, 2009, 1:50 am

Did Google make £1.6bn PROFIT or was this just the revenue??? You don't pay tax on your revenue but you net off all costs against that. The cost of the 770 staff in London would need to be deducted, office costs, etc etc. This would make the amount of profit liable to tax a much smaller figure. Haven't read all the details on this but it looks like politicians jumping on a bandwagon when they don't have a clue what they are talking about.

DEB

December 24, 2009, 3:12 am

This is pretty common for tech companies with Ireland's lower corporation tax. Nothing more than Ministers with sand in the proverbial because they couldn't wriggle out the expenses scandal. Oracle, Microsoft and Google all use the same methods. Good luck taking on 3 juggernauts Vince.

Chocoa

December 24, 2009, 4:50 am

WoW! Pretty damn cute from a bunch of public servants accused of leaching every penny they can from the system!





Anyway 'tax avoidance is an art, tax evasion is a crime.' So.. Austin, if you have evidence let 'em have it.... being an ex BBC reporter I am sure he can justify his assertions.

Gordon394

December 24, 2009, 7:11 am

@Me - £1.6bn PROFIT: http://www.trustedreviews.com/... You need to double check too, before you go off on one ;)


@Chocoa - agreed.

Max

December 24, 2009, 7:49 am

This is another example of how stupid MPs are. Instead of attracting business and being friendly to corporations (they pay for the NHS/schools with their taxes, right?) they hound them with complex regulation and high rates of corporation tax. Especially stupid considering the Republic have lower rates for small and large businesses and less complex regulation.





Latest idiocy is deeming that the games industry is not worth keeping around with a tax break, I know a whole bunch of us are looking to move where tax conditions will be more friendly if the next lot don't extend the current tax breaks for tech companies.





It's really sad the way things are going in this country, and I can't see Cameron and his lot doing anything differently really. If he is going to he certainly isn't talking about it a whole lot...

Me

December 24, 2009, 4:11 pm

@Gordon - so that'll be $1.6bn profit, note $$$$, on their worldwide business in Q3 2009. Your latest article was £1.6bn, note ££££, revenue through their UK operation.

Den

December 24, 2009, 6:07 pm

@Me said - If you Read the original article from the Times, you will see that is £1.6b profit from the UK, Europe was something like &#83646.7b. So it is £££££ ;-)

Nick 11

February 1, 2010, 11:17 pm

A company has absolutely no "social responsibility"! It's purpose is to make money, nothing else. As others have previously said, if the UK were not such a fanatic at taxing everything that stands still there might now be £200m in the British account instead of the Irish one.

comments powered by Disqus