GOOGLE IS TO PAY a backdated £24m tax bill after HM Revenue & Customs carried out a review of the search engine’s business structure.
The bill is related to US shares given to London staff and then billed to its Irish arm to offset UK charges.
Companies including Google, Amazon and Starbucks have been in the firing line in both the media and parliament for their use of offshore jurisdictions to drive down their UK tax liabilities.
The Public Accounts Committee has been particularly strident in its criticism, and in June last year called on HMRC to engage in a “full investigation” of the search engine’s tax affairs.
The issues stem from Google’s position that the role of its London team is to drum up business, before deals are concluded by their Irish counterparts, allowing it to book the revenue in Dublin where the corporate tax rate is 12.5%.
The committee at the time described the claim as “deeply unconvincing”.
Google has consistently maintained it complies with UK tax law and that it pays the bulk of its annual tax bill where its business originated – the US.
The company said: “We’re a significant contributor to the UK economy – having created over 2,000 jobs. In 2013 alone, we invested more than £300m in property in London and tax related to our UK operations totalled more than £150m.”
HMRC would not comment specifically on Google, but said: “We man-mark the most complex and potentially high risk businesses and, since 2010, we have collected over £23 billion in extra tax through challenging large businesses’ tax arrangements. We relentlessly pursue businesses which don’t play by the rules and these results reflect this.”
Research also finds that 84% of businesses believe that the government has not provided enough information about digital tax plans
A total of £16bn was lost through tax fraud last year, according to estimates released by Pinsent Masons
Additional tax a result of compliance investigations by HMRC, but overall revenue falls
Firm expands East Anglian team with appointments to the audit practice and private client tax team