As we’re sure you’re aware (it’s been all over the news), Google’s tax payments are a hot topic again; and that’s thanks to a worldwide web of loopholes that mean the French government are set to be paid £380m, even though the UK is where Google have most staff and biggest base outside America.
Google is even planning to build a £1bn London based office which will employ around 5,000 staff.
And yet still the money – three times what Google paid in the UK, which was £130m, and even that was a battle which took 6 years – goes to France.
This seems to be mainly due to the fact that French officials are refusing to allow any assets or money to be filtered through Dublin (which has a lower tax rate); everything must go through Paris.
Many have accused the UK government of not understanding the problem, and allowing Google to get away without paying what they really owe. It’s something that the Prime Minister and others have laid squarely at the feet of Chancellor George Osborne, especially since he called the £130m payment a victory which, in the light of the French payment, it clearly was not. Critics have called the payment ‘derisory’ since Google made about £6bn in profit over the past 10 years – all in the UK. £130m in taxes doesn’t even begin to cover it.
Now Google is set to have a meeting with both HMRC and MPs to explain why they paid just £130m to the UK, despite clearly owing more (unless they had a tax rate of 3%), and what will happen next. The National Audit Office may even investigate. The Treasury Committee and the Commons Public Accounts Committee are already carrying out their own investigations.
According to reports, Google is being chased for £1bn from Italy too.
Another report suggests that Google should be paying closer to £200m a year in the UK, showing that they have massively underpaid.
Please call or email to arrange your FREE consultation for any of our services.
We're a modern, friendly and proactive accountancy service.