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Google to be grilled again over dodgy UK tax arrangements

Updated Internet giant denies the claims
Wed May 01 2013, 10:50
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INTERNET GIANT Google reportedly will be quizzed again over its tax arrangements in the UK, along with its auditor Ernst & Young.

Google was investigated for low tax payments last November along with retail giant Amazon, for paying just £6m on profits of £395m.

Reuters reports that Margaret Hodge, head of the Public Accounts Committee (PAC) of Parliament, will call for Google to be re-questioned about its UK tax arrangements, in particular how it closes sales and works between its London and Dublin offices.

This apparently follows a Reuters investigation of Google's activities in the UK which highlighted inconsistencies in the company's tax arrangements. The news agency interviewed Google customers and former staff, as well as examining Linkedin profiles for more than 150 Google staff, which apparently showed that the firm made sales in the UK.

Reuters explained, "The investigation found that while Google executive Matt Brittin said Google doesn't make sales to UK customers from the UK, some of its staff and UK customers think it does.

"Lawyers and academics say that if UK staff did sell to UK customers, that could have implications for Google's tax status in Britain, opening the possibility of much bigger tax bills."

However, a PAC spokesperson told The INQUIRER that it could not confirm the Reuters report. It said, "No there is no confirmation. The committee has not met to agree any recalls and cannot till after state opening."

Google told us that the Reuters report is misleading, too. In a statement, a spokesperson for the company said, "The Reuters article is wilfully misleading. As we told them in our statement, Matt Brittin clearly explained the roles of UK staff in hours of evidence to the Public Accounts Committee.

"He said, 'If [customers] want to buy advertising from us they are encouraged to do so by our people in the UK - they will buy it from our expert team in Dublin. The people on the ground [in the UK] are helping people make the most of the web and the people in Ireland are helping to operate the systems and sell advertising to the businesses that want to work with us.'

"In our written evidence, which we also shared with Reuters, we said, 'Google UK Ltd provides sales, marketing and R&D support to Google Inc.'

"We have written to the PAC chair Margaret Hodge to explain that Matt Brittin's evidence was truthful and accurate and that this article paints a very misleading picture.

"As we have said many times, we comply with all the tax rules in the UK and in every other country in which we operate."

Still, Google's Eric Schmidt might come to regret some comments he made earlier this month. Speaking to BBC's Radio 4, Schmidt said that he is cool with Google's UK tax bill, and seemed to try and justify the firm's low tax payments. µ


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