Call for UK customs to investigate Google

Thursday 13 June 2013 17.06
UK committee chairwoman Margaret Hodge branded Google's tax arguments as "brazen"
UK committee chairwoman Margaret Hodge branded Google's tax arguments as "brazen"

An influential parliamentary committee has called on the UK Revenue & Customs service to "fully investigate" Google.

This comes after the committee found that the internet giant uses "highly contrived" tax arrangements with the sole purpose of avoiding corporation tax on its multibillion-pound revenues in the UK.

In a scathing report, the House of Commons Public Accounts Committee dismissed as "deeply unconvincing" Google's claims that its UK sales activities take place in Ireland and found that the company's account of its operations made "absolutely no sense".

Committee chairwoman Margaret Hodge branded the company's arguments "brazen".

She said the only way for Google to repair its damaged reputation was to arrange to pay a fair share of tax in the countries where it earns its massive profits.

But the report was also highly critical of tax authorities, finding it was "extraordinary" that HMRC did not challenge Google over its arrangements.

The cross-party committee also warned that the UK's big accountancy firms had damaged their reputations by helping big business clients avoid tax, calling on them to recognise that "the public mood on tax avoidance has changed".

The committee urged the UK government to take a lead internationally on modernising "out-of-date" tax frameworks covering internet-based commerce, and commended Prime Minister David Cameron for putting tax avoidance at the heart of his agenda for next week's G8 summit in Northern Ireland.

Google generated around $18 billion in revenue from the UK between 2006 and 2011, but paid just $16m in corporation tax, found the PAC report. During this period, the main rate of corporation tax was between 30% and 26%.