Monday, 21 December 2009

Google pays no tax on £ 1.6 bn in UK

Internet search giant Google has not paid any tax on its 1.6 billion pound advertising revenues in Britain last year, a media report says.

"Google, the Internet giant whose informal corporate motto is 'don’t be evil', did not pay any tax on its 1.6 billion pound advertising revenues in Britain last year," the Sunday Times reported.

Google legally avoided paying more than 450 million pound in corporation tax to HM Revenue & Customs in 2008, as it diverted all its advertising earnings from customers in Britain to its Irish subsidiary, the newspaper said.

Citing accounts filed with the Companies House in the past week, the daily said, "Google's 2008 UK corporation tax bill amounted to just 141,519 pound -- and that was tax on the interest generated by its cash pile in UK bank deposits."

Vince Cable, the deputy leader of the Liberal Democrats, has urged Google to "pay its fair share" of tax.

"Google’s reputation will be severely damaged if it continues to behave in this way. It is ducking its social responsibility," Cable told the Sunday Times.

Cable further added that "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, however, said its structure complies fully with UK tax rules and that the company makes a "substantial" contribution to tax receipts wherever it operates.

At present, about 13 per cent of Google's global revenues, come from the UK, and 770 staff are based at its London offices.

Austin Mitchell, the Labour MP for Great Grimsby who campaigns against tax avoidance, said, "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."

Meanwhile, Peter Barron, director of communications for Google in northern Europe, told the newspaper: "Google makes a big investment in the UK, with over 800 employees, and we make a substantial contribution to local and national taxation.

"But the fact is that our European headquarters is in Dublin. We comply fully with the tax laws in all the countries in which we operate."

Quoting accountants the report said that if Google had paid tax on its 1.6 billion pound advertising revenues in Britain, it could have raised about 450 million pound for the public finances -- "enough tax to fund three NHS hospitals, buy at least eight Chinook helicopters or pay the annual salaries of about 15,000 policemen.”