August 13, 2012

Google Under Intense UK Tax Scrutiny

Michael Harper for - Your Universe Online

Google, the world´s largest internet search provider, is often the focus of global scrutiny for their less-than-respectable privacy policies. However, a new scandal has risen for the California company in the UK concerning their tax bills.

Last week, it was announced that Google continues to pay what many consider to be less than their fair share when it comes to their taxes, paying only £6 million in UK taxes on a profit of £395 million.

Today, John Mann, a Labour member of the Treasury Select committee has called out Google, saying he plans to bring their executives to task in front of the Treasury Committee.

“It is entirely immoral, this is a company avoiding its obligations and we are letting them get away with doing it,” said Mr Mann, speaking to the Telegraph.

“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, we would be looking at covering the issue in this parliamentary session, so before Easter, realistically.”

Google´s executive chairman, Eric Schmidt, has previously made statements about his companies attitude towards these UK taxes, saying, “We could pay more tax but we would have to do so voluntarily.”

"It's very good for us, but to go back to shareholders and say 'We looked at 200 countries but felt sorry for those British people so we want to [pay them more]' ... there is probably some law against doing that.”

Google´s British arm is run as an agent of their Irish subsidiary, meaning they are only required to pay tax on 10% of their earnings. Any other monies are then run through another subsidiary in Bermuda, further allowing the search giant to skimp on their tax bill.

Though Google isn´t engaging in any illegal activity, Mr. Mann still suggests the committee should question Google´s actions.

“This sort of scheme is running, meanwhile we are providing a legal base and defense for Bermuda because it is a British dependency,” said Mann.

Google has also recently expanded their engineering staff in the UK by 40%, bringing their total number of engineers to 250.

All told, Google has more than 1,300 British employees in London and Manchester.

Google has also recently built a complex in London´s East End which provides a free workspace for technology startups. Called “Campus,” this space was opened by Chancellor George Osborne and is the first of its kind opened by Google.

This expansion and growth into the UK is causing many British people to wonder why Google is so keen on paying fewer taxes as their visibility increases. An online petition by group 38 Degrees asks Google to “do the right thing,” saying, “There´s nothing responsible about only paying £6 million in UK tax on hundreds of millions of pounds of revenue.”

So far, the online petition has reached more than 45,000 signatures of their 50,000 goal.

"We comply with all the tax rules in the UK,” said a Google spokesperson in response to this matter.

“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."