Google is set to come under fire again after the disclosure yesterday that it paid only £11.6m in UK corporation tax in 2012, on UK revenues of £506m.
Google’s UK arm made a profit of £36.8m in 2012, while its global profit was a whopping $10bn.
The amount it paid in tax last year was disclosed in its Companies House accounts, and highlighted by The Telegraph.
Google has been heavily criticised by politicians and the public for the amount of corporation tax it pays in the UK.
In August 2012, it was lambasted for Expert advises Brits of upcoming ‘payments on account’ deadline to avoid a 7.5% HMRC interest charge. In May this year, MPs on the Public Accounts Committee accused Google of “doing evil” by trying to “disguise” its “devious” tax arrangements.
Google picked up particular flack because it had been attributing sales transactions to its Ireland office and saying its UK office was mainly just for marketing functions, thereby largely dodging UK corporation tax on sales. A Reuters investigation suggested that, in fact, it was UK-based staff who had made the sales, not Irish staff.
In May this year, Google chairman Eric Schmidt said: “I can’t defend an irrational structure – a computer engineer would not have designed this.
“All of us are operating in a very, very long-standing tax regime which was set up for various reasons that don’t necessarily make sense to me or anyone else.”
Schmidt continued: “Google will continue to invest in the UK no matter what you guys do – we love you guys too much, we will continue investing in the UK no matter what.”
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