Google Pays Corporation Tax in the US instead of the UK

Google paid only £11 million in British corporation tax in 2012, despite revenues of £500 million. Indeed, the company made global profits of £6 billion last year, but says that it pays bulk of its tax where business originated – the United States. Its representatives argued that the company made a significant contribution to the United Kingdom through investment and jobs.

Back in 2011, Google paid £6 million while showing a £24 million loss on a £400 million turnover. The US company has been repeatedly accused of failing to pay its fair share of tax in the United Kingdom. In addition, the tech giant has been criticized for designating Ireland, and not the United Kingdom, as Google’s official European sales base in order to benefit from lower company tax rates.

Google’s former employee, who turned to be a whistle blower, handed over documents to HM Revenue and Customs to show how the company’s London sales staff would negotiate and sign contracts with UK customers, with cash paid into a British bank account. However, the deals were allegedly booked through Google’s Dublin office in order to minimize its liabilities.

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According to the recent Companies House filings, the tech giant also set aside £24 million for taxes associated with shares awarded to staff between 2005 and 2011, in order to comply with new rules from HMRC. In response, Google claimed it was right that the majority of its tax should be paid in the United States. The company’s representatives argued the company made a huge contribution to Britain via investment and jobs.

Google explained that like most multinationals it pays the bulk of its £1.2 billion corporate tax bill where its business originated – the United States. This is a rate of almost 20%, roughly what a Britain-based entity would pay. Google also considers itself a significant contributor to the British economy having created more than 2,000 jobs. The company has invested over £300 million in property in 2013, with tax related to British operations totaled £150 million.