While the back tax payment may look big, many say it’s not enough.
Advertisement
Moving forward, the taxes paid will be more reflective of the company’s actual revenue and profits.
Labour’s finance spokesman John McDonnell said the government should publish more information about the Google deal.
“It looks to me… that this is relatively trivial in comparison with what should have been made, in fact one analysis has put the rate down to about 3 percent, which I think is derisory”, he told BBC Radio on Saturday. It comes following years of parliamentary scrutiny of the likes of USA tech giants Google, Facebook, Apple, and Amazon, all of which operate in the United Kingdom but are able to perfectly legally squirrel away profit to tax havens, such as Bermuda and the Cayman Islands.
He said the Government had collected tax from Google that the Labour government had failed to collect when it had been in power and it was “a bit rich” for Labour politicians to criticise the amount paid. “Bet individual taxpayers wouldn’t get off as lightly as Google on back tax”, she said. Some senior executives of the US-based search and tech giant have stood by a defensive stance saying that the company is likely to delineate new rules in order to release its accrued tax payments. HMRC “is effectively admitting it pulled in too little tax from Google for nine out of ten years”.
The committee’s previous chairwoman, Labour MP Margaret Hodge, was an outspoken critic of the firms’ tax affairs and led tough questioning of companies.
Mrs Hodge branded tax avoidance “immoral” and suggested that Google’s tax activities were “evil”. European officials have accused the company of using subsidiaries in Ireland to avoid paying taxes on revenue generated overseas.
“Google tax bill is a victory for the action we’ve taken”. That means the company won’t have to pay any penalties for diverting profits. “We now expect to see other firms pay their share”.
Writing in The Daily Telegraph, days after Google reached a deal with HMRC to pay £130m in back taxes, Mr Johnson said: “It has never seemed fair that some of these companies – no matter how wonderful the service they provide – should be paying so much less in tax than the high street tea rooms and bookshops they have pulverised”.
Public anger has been mounting for years as details have emerged of how multinational companies use complicated structures to dodge taxes in some countries. The settlement reflects that shift.
Advertisement
But to keep with the bread analogy, the deal – which covers taxes owed by Google since 2005 – is somewhat half-baked.
