Search engine giant, Google UK, has been labelled ‘improper and immoral’ by a member of the Treasury Select Committee for allegedly paying only £6m tax on UK revenues of £395m in 2011.
Google under Tax Avoidance claims from HMRCUrging Google executives to stand before the parliamentary committee and answer questions on alleged tax avoidance, John Mann, Labour member on the Treasury Select Committee, has said:
“It is entirely immoral, this is a company avoiding its obligations and we are letting them get away with doing it. I think it would be highly appropriate to pull a Google executive in front of the Committee to justify their failure to pay proper taxes, we would be looking at covering the issue in this parliamentary session, so before Easter, realistically.”
Speaking of how Google runs their UK division and has lowered their tax liabilities, Richard Murphy, from the Tax Research UK, told The Independent:
“Google uses its UK Company as an agent to sell products on behalf of its Ireland division. The bulk of the proceeds of the sales go to Ireland, while a commission – understood to be around 10 per cent – remains in the UK and is taxable, less costs. Google Ireland then pays a portion of the cash to Google Bermuda as a licensing fee, ensuring that a large portion of Google’s profits find their way to the tax haven.”
A Google spokesperson said that they abide by all tax rules and “make a substantial contribution to the UK economy through local, payroll and corporate taxes.”
“We also employ over a thousand people, help hundreds of thousands of businesses to grow online and invest millions supporting new tech businesses in East London. We comply with all the tax rules in the UK,” Google’s spokesperson added.
Google’s executive chairman, Eric Schmidt, also commented on the tax avoidance allegations:
”We could pay more tax but we would have to do so voluntarily. It’s very good for us, but to go back to shareholders and say ’We looked at 200 countries but felt sorry for those British people so we want to [pay them more]’…there is probably some law against doing that.”
Since news broke last week in The Telegraph, revealing how little tax has been paid in the UK on Google’s UK revenue in 2011, a petition from tax avoidance protesters – asking Google to pay their ‘fair share – of tax received nearly 4,000 supporting signatures in just two days (figures as of Friday 10 August).