An arrangement for US company Google to pay GBP130m in UK back taxes continues to be criticised as “derisory” and labelled a “sweetheart deal” by critics. The payment covers cash owed since 2005 and follows a six-year inquest by Her Majesty’s Revenue and Customs.Google is among several multinational companies accused of preventing tax – despite making billions in UK sales. In March’s Budget, Chancellor George Osborne declared the introduction of a so called “Google tax” targeting companies that transfer their profits abroad.
Google has its European headquarters in Ireland, which includes a reduced corporation tax rate compared to UK. It has additionally used business constructions in Bermuda, where the corporation tax rate is zero, to shelter gains. Such moves are legal and Google – a US company, which pays nearly all its own taxes there – says it’s abided by international tax rules. The deal with HMRC may also find Google begin to cover tax “based on sales from UK-based advertisers, which represents the size and range of our UK company”, the US on-line search company included.