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

by: Gary SimsNovember 13, 2012

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 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.

  • MasterMuffin

    Apple does the same with even more cheating -.-

  • It should be the same for corporation like people. Everybody has to pay taxes. And the government should push on corporations like Google, Amazon, etc, etc

  • soumkhane

    Leave a messa

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  • Whybecause if you could you would aswell…end of!

  • TechGuy

    I thought this happened yesterday? Sure I saw it on the news in the UK

  • Dave Weinstein

    Amazon passes on the savings to the consumers.

    Google provides it’s services to consumers for free!

    Starbucks collects a boatload of VAT for the government.

    I’m not sure why anyone should have ANY grounds for complaints based upon them using professionals to legally minimize the tax they pay.

    Of course, the main thing that these companies have in common is that they are successful. It’s not an issue of personal vs. corporate. The issue here is “tax the rich” BECAUSE they’ve got money.

  • PJF

    The reason Google (and the others) pay so little tax in the UK is purely and simply because so little tax is due in the UK. The UK is part of the European Union, and it is a fundamental legal structure of the EU that it is a Single Market with Freedom of Establishment.

    That means a company can base itself anywhere in the EU and trade everywhere in the EU. That’s the law – by deliberate design – and the UK signed up for it. Google (Europe) pays corporation tax in Ireland where it is based, and not in the UK, nor in the other 25 EU member states where it can freely trade. Every other single company, large and tiny, in every other EU country operates on, and is taxed on, this same legal basis.

    There is no bending of the rules. These are the rules – the law – operating as intended. Pundits and politicians may get all exciteable as if rabble rousing the public will change the facts, but Her Majesty’s Revenue and Customs calmly check the accounts and collect only what is due. And that’s a trigger happy “tax first, rebate late” outfit, I can assure you.

    Personally, I don’t see anything unfair with Google’s tax law compliance. Anyone who does might better attend the tax law, not Google.