Google and Starbucks to face parliamentary scrutiny over tax

The public accounts committee is due to quiz Google and Starbucks over their tax affairs in the UK, the Financial Times has reported.

The parliamentary scrutiny comes after revelations that big corporates including Apple and Facebook have been avoiding tax in the UK.

“We want to ask them for an opportunity to explain why they don’t pay proper levels of tax in the UK,” Margaret Hodge, who chairs the committee, told the Financial Times.

Google UK reported a tax charge of £3.5m in 2011 against a £396m turnover. In a statement, the search engine giant said: “We make a substantial contribution to the UK economy through local, payroll and corporate taxes. We also employ over 2,000 people, help hundreds of thousands of businesses to grow online and invest millions supporting new tech businesses in east London. We comply with all the tax rules in the UK.”

Earlier this month, Reuters reported that Starbucks had paid £8.6m in the UK in corporate tax since 1998. The coffee chain denied any wrongdoing and said that the said it would comply with any government inquiry “with transparency and respect”.