You are only what you are when no one is looking - Robert C. Edwards
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Google avoids millions in UK taxes
Can we have our wonga back?
Tue Apr 21 2009, 10:36
GOOGLE HAS AVOIDED paying over £100 million in UK tax through employing an elaborate revenue billing structure, an accountant reckons.
Apparently, Google processes most of its sales to UK citizens through its Ireland division, allowing the company to legally pay very little tax because of the resulting small UK turnover.
Accountant Richard Murphy reckons that, in 2007, Google generated revenues of £1.25 billion from the UK but only paid £600,000 in corporation taxes.
Meanwhile, Google also pays very little tax in Ireland, which Murphy suggested was possible because Google is owned by an intermediate Bermuda holding company.
“This can only be explained in my opinion if the Irish Google subsidiary makes substantial payments to a low or no tax jurisdiction whose activities are undertaken intra-group and are not disclosed in the group accounts as a result,” noted Murphy in his blog.
Murphy, who was asked to follow up the issue for a Sunday Times investigation, said he had decided to analyse Google’s accounts because not only is Google the biggest brand in the world but it also strives to achieve recognition for holding a position of corporate responsibility.
“In fact it is not acting with the degree of responsibility one would expect,” said Murphy.
“Of course, Google can say that it has not avoided tax – the tax paid is the result of the structure it uses. But what I do show is that if tax paid is a measure of corporate social responsibility to the communities from which it generates its income – and in its case it generates more than 15 per cent of its total revenue from the UK – then it is not acting in a responsible fashion in this county where its activities are, however, having significant social consequence."
The claims emerged just weeks after governments around the world pledged to tackle tax evaders at the G20 Summit.
“We stand ready to deploy sanctions to protect our public finances and financial systems,” the G20 leaders fibbed in The Global Plan for Recovery and Reform. “The era of banking secrecy is over."
UK chancellor Alistair Darling is set to build on the pledge and reveal a new crackdown on UK tax evaders in Wednesday's budget. Tax evaders that deprive the government of income greater than £25,000 are expected to be named and shamed by the government. µ
Apparently, Google processes most of its sales to UK citizens through its Ireland division, allowing the company to legally pay very little tax because of the resulting small UK turnover.
Accountant Richard Murphy reckons that, in 2007, Google generated revenues of £1.25 billion from the UK but only paid £600,000 in corporation taxes.
Meanwhile, Google also pays very little tax in Ireland, which Murphy suggested was possible because Google is owned by an intermediate Bermuda holding company.
“This can only be explained in my opinion if the Irish Google subsidiary makes substantial payments to a low or no tax jurisdiction whose activities are undertaken intra-group and are not disclosed in the group accounts as a result,” noted Murphy in his blog.
Murphy, who was asked to follow up the issue for a Sunday Times investigation, said he had decided to analyse Google’s accounts because not only is Google the biggest brand in the world but it also strives to achieve recognition for holding a position of corporate responsibility.
“In fact it is not acting with the degree of responsibility one would expect,” said Murphy.
“Of course, Google can say that it has not avoided tax – the tax paid is the result of the structure it uses. But what I do show is that if tax paid is a measure of corporate social responsibility to the communities from which it generates its income – and in its case it generates more than 15 per cent of its total revenue from the UK – then it is not acting in a responsible fashion in this county where its activities are, however, having significant social consequence."
The claims emerged just weeks after governments around the world pledged to tackle tax evaders at the G20 Summit.
“We stand ready to deploy sanctions to protect our public finances and financial systems,” the G20 leaders fibbed in The Global Plan for Recovery and Reform. “The era of banking secrecy is over."
UK chancellor Alistair Darling is set to build on the pledge and reveal a new crackdown on UK tax evaders in Wednesday's budget. Tax evaders that deprive the government of income greater than £25,000 are expected to be named and shamed by the government. µ
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...is to the laws. If it ain't illegal, then it's just whining by a Googlehater. If it's wrong, make it illegal.
As Jack Smith indicates, Google is avoiding not evading. So, when the government says 'Tax evaders that deprive the government of income greater than £25,000 are expected to be named and shamed by the government' it's probably true, but won't contain *any* well known company as they're all avoiding rather than evading.
The uneducated might think that going to all sorts of convoluted methods that aren't feasible to the average man on the street, to reduce your tax bill is still evasion of a sort, but it's legal so that's ok..
“Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands: Taxes are enforced exactions, not voluntary contributions. To demand more in the name of morals is mere cant.“
Honorable Learned Hand, U.S. Appeals Court Judge, Helvering v. Gregory, 69 F.2d 809 (1934).
all the big mega-corps are at it. they use creative accountants to post a loss so they dont have to pay tax.
...but they make sure their executives get their vast wages and free expenses and massive bonuses. vile scum...
its the perfect crime
Every person and company wants to avoid paying tax and if the various governments around the World write holes in their laws which allow people or companies to take advantage of these, what is so bad about that?
We all do it. Big or small.
"... an accountant reckons."
I reckon you're from Natafunga galaxy and you've come here to take over our planet. Please publish an article.
If they didn't do anything illegal then what's the point? You mean they're avoiding tax they're not liable to pay?
We were under the impression that stimulas was to chew the VAT and cut the cheeze.
Our bad. Feeling Lucky?
Will we see Bono - champion of the poor and under-priviledged - shouting his mouth off at these tax dodgers ?
Err... probably not...
http://www.bloomberg.com/apps/news?pid=20601109&sid=aqdKjGJi9cHc&refer=home
"This is somebody who's exceptionally rich taking the opportunity to shift his tax burden to somebody else, but then asking governments around the world to spend that tax take in the way that he would like,'' Murphy says. "
They're all at it...