by Robert Watts
The Sunday Times [UK]
20 December 2009
Google, the internet giant whose informal corporate motto is “don’t be evil”, did not pay any tax on its £1.6 billion [$2.56 billion US] advertising revenues in Britain last year.
The firm, which has a substantial presence in London, diverted all its advertising earnings from customers in Britain to its Irish subsidiary.
The arrangement allowed Google legally to avoid paying more than £450m in corporation tax to HM Revenue & Customs in 2008, The Sunday Times has established.
The disclosure prompted politicians to criticise Google, widely lauded as a pioneer of the internet age, for “ducking its social responsibility” and for “tax avoiding”.
Accounts filed with Companies House in the past week show Google’s 2008 UK corporation tax bill amounted to just £141,519 — 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, urged the search firm to “pay its fair share” of tax.
“Avoidance like this is hard to stomach at the best of times,” said Cable. “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.”
Google says its structure complies fully with UK tax rules and that the company makes a “substantial” contribution to tax receipts wherever it operates.
About 13% of Google’s global revenues now come from the UK, and 770 staff are based at its London offices.
Continues at The Times.
