Google to answer questions about why it pays so little tax in the UK

November 13, 2012
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The Committee of Public Accounts, a body setup by the UK’s House of Commons, is to ask Google (along with Starbucks and Amazon) why it pays only a small amount of tax, just 3.4 million pounds, in Britain when it had 2.5 billion pounds of sales in the UK last year. 2.5 billion is 2500 million pounds in sales, well done Google. But by paying only 3.4 million pounds in tax the search giant paid less than 0.2% in tax. The company should be paying 100 times more than that.

Now we all like Google here, they gave us Google Search, Gmail and of course Android – but like death, no one can avoid taxes. At a time when the average man in the street is seeing the government implementing austerity measures it is hard to have any sympathy for Google. “It is hard for the ordinary person to believe it’s fair,” said Margaret Hodge, the chairman of PAC. “It makes people incredibly angry in the current fiscal climate.”

Google isn’t the only one trying to bend the tax rules. There was outcry in the UK last month when it was shown that Starbucks had paid no corporation, or income, tax in the UK in the past three years. Yet over the last 13 years Starbucks made sales of 3.1 billion pounds. Amazon are in the same boat. It avoids paying tax in the UK by funneling its European sales through a Luxembourg-based unit. This meant it paid only 11% on foreign profits last year. The company is happy to have a .co.uk domain and sell goods to British consumers as long as they don’t have to pay any tax!

Starbucks Chief Financial Officer Tory Alstead, Matt Brittin, Chief Executive Officer of Google UK, and Andrew Cecil, Brussels-based Director of Public Policy for Amazon are all scheduled to give evidence to the committee. Let’s hope that fairness will prevail.

What do you think? Are you upset with companies like Google and Amazon for not paying their fair share when your salary is automatically taxed? Leave a comment below and let me know.

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