Written by: Keith Tully
Published: 20th May 2013
It is the search engine giant that rivals all others but it has now finally met it's match.
The company has been confronted by MPs over its attempts to avoid paying UK tax and has been branded ‘devious, calculating and ethical.’
In a recent hearing, Google admitted that it receives more in government grants than it pays in UK corporate tax.
Members of the House of Commons Public Accounts Committee (PAC) condemned the company for paying just £6 million in UK corporation tax in 2011, despite earning more than £3 billion in advertising revenues in this country.
Matt Brittin, Google’s head of operations in Northern Europe, had been called to give evidence after it emerged UK staff were selling advertising. A stream of whistleblowers had contacted MPs with examples of their payslips, which showed substantial bonuses being paid based on sales.
However, the senior executive maintains that they do not sell advertising in the UK and that 99% of all advertising business takes place in Dublin. Mr Brittin said that sales staff in the UK do promote the firm and encourage people to spend money but the transaction always takes place in Ireland.
Margaret Hodge, the Committee’s Chairperson, lambasted the claims saying: “I think that you do do evil. You use smoke and mirrors to avoid paying tax.”
She added: “We all accept the billing is in Ireland. If sales activity is taking place in the UK, you are misleading both Parliament and the taxpayers in suggesting that is not happening.”
And Ms Hodge also criticised Lin Homer, the Chief Executive of HM Revenue and Customs, (HMRC) over the way staff interpreted the law for companies like Google. She said: “I think your judgement belies common sense. We don’t trust your judgement. I think your staff are being bamboozled.”
Ms Homer however, insists that the taxman is “better qualified than MPs to determine what taxes were due.”
If your business is struggling with VAT tax arrears, get in touch with Real Business Rescue today; we are here to help companies in trouble.