In Brief

Google’s £50m Treasury bill to ‘reignite tax debate’

Tech giants facing growing public and legislative pressure to pay their fair share

The amount Google pays in tax in the UK will increase this year, as the tech giant and others like it face mounting pressure to pay their fare share.

Google’s annual accounts show it will pay corporation taxes of £49.3m on UK profits of £202.4m.

Although this is the highest Treasury bill ever paid by Google, “it will be likely to reignite the debate about taxation and digital firms”, says the BBC’s economics editor Kamal Ahmed.

Google employs 3,280 people in the UK and its UK arm registered revenues of £1.27bn over the past 12 months, an increase of 22% year-on-year.

However, “the figures do not reflect how much Google earns in the UK since the company books its UK advertising sales abroad, depressing how revenue from British advertisers is recognised in the accounts”, says The Daily Telegraph.

A tax on those revenues “would raise substantially more in the UK than the present £50m tax bill on its UK profits”, says Ahmed.

Google came under attack in 2016, after agreeing a £130m settlement with then chancellor George Osborne. The search giant was accused of striking a “sweetheart deal” which short-changed taxpayers, The Guardian reports.

Now, a growing consensus among the pubic and politicians, especially in Europe, could finally mean a crackdown on tax loopholes used by big firms.

Last week, the European Commission unveiled ambitious plans for a ‘digital tax’, under which tech companies would pay 3% on digital revenue earned in Europe. The Commission says top digital firms pay an average tax rate of just 9.5% in the EU, compared to 23.3% for traditional companies.

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