MPs could question Google bosses over tax avoidance

Aug 13, 2012

Google might be called before Treasury select committee as part of investigation into tax avoidance, says MP

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GOOGLE bosses could be forced to answer questions before Parliament over tax avoidance schemes which resulted in the search giant paying the exchequer just £6m on UK turnover of £395m in 2011.

The Independent reports that a member of the House of Commons Treasury Select Committee expects a Google exec to appear in front of MPs before Easter as part of a wider investigation into tax avoidance.

Committee member and Labour MP John Mann said: "It is entirely immoral, this is a company avoiding its obligations and we are letting them get away with doing it.

"I think it would be highly appropriate to pull a Google executive in front of the Committee to justify their failure to pay proper taxes.
Whether it is illegal or immoral, the British taxpayer loses out. Google is one of the big ones but there are others."

The issue of Google's tax avoidance hit the headlines last week after it emerged that the company used a complex and entirely legal system last year to pay just £6m in tax.

Tax expert Richard Murphy explained to The Independent how the system works:

"Google uses its UK company as an agent to sell products on behalf of its Ireland division.

The bulk of the proceeds of the sales go to Ireland, while a commission – understood to be around 10 per cent - remains in the UK and is taxable, less costs. Google Ireland then pays a portion of the cash to Google Bermuda as a licencing fee, ensuring that a large portion of Google's profits find their way to the tax haven."

Last year, Google paid tax of £935,000 on revenues of £239m.

A petition started by campaigners calling on the internet giant to "pay its fair share" had attracted 44,000 signatures by this morning.

A Google spokesman said: "We comply with all the tax rules in the UK. We make a big contribution to the UK economy by employing over a thousand people, helping hundreds of thousands of businesses to grow online and investing millions supporting new tech businesses in East London."

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