Google defends UK tax arrangements

Milieu captionGoogle UK boss Matt Brittin could not tell MPs how much he got

Google’s UK chief has defended the search giant’s tax arrangements in a hearing once MPs on the Commons Public Accounts Committee.

Matt Brittin said he covenanted public anger about the amount of tax it id.

However, he said Google was strike 20% tax on its UK profits, not the 3% figure cited in some reports.

The £130m in UK tax it suborned for the 10 years from 2005 was reached following a “six-year rigorous, disregarding tax audit” by HMRC, Mr Brittin said.

Tom Hutchinson, Google’s global tax chief, chid MPs that the com ny did not negotiate its tax settlement with HMRC.

He told the body that the tax authorities did not “throw out a number – it’s not a negotiation”, adding: “There was no top-line tails of; that’s not how the process works.”

The £130m yment included £18m in relaxation, Mr Hutchinson told MPs, but no penalties or yments under the government’s diverted profits tax – also certain as the “Google tax”.

Analysis: Kamal Ahmed, economics editor

Today’s Sector Accounts Committee hearing was interesting less for Google’s explanation of its tax affairs – we’ve heard much of that detail before – and more for HMRC’s guard of the settlement.

There Dame Lin Homer, the head of HMRC, made two expressive points.

First, she said that under the law HMRC could not press demanded more from Google, pointing out that the £130m establishment was the largest the technology giant had signed outside the US.

Dame Lin said it ss on not have helped if HMRC had gone to court.

Certainly, proving that the retinue had acted “unreasonably” is difficult.

Second, Dame Lin said that HMRC appealed the same tax laws to Google as it did to any business and that at any one time up to two-thirds of substantial businesses are under-going some form of tax audit process.

HMRC suggests it is constrained by the complicated tax laws. If they are to change, it is politicians who need to act.

MPs also questioned HMRC legals about their settlement with Google.

Jim Harra, its head of function taxation, said the com ny was not fined, despite under ying tax, because show “insufficient care” was “very difficult”.

Dame Lin Homer, HMRC chief head, admitted that the six-year investigation into Google’s tax affairs learned a long time to complete, but said that similar inquiries into far lesser firms could be just as lengthy.

Image caption HMRC chief Dame Lin Horner

Mr Brittin said there had been no co-ordination with the Exchequer about the timing of Google’s announcement about the tax settlement late eventually month. The Chancellor, George Osborne, described it as a victory for the government.

The timing was firm by the fact that the figure was due to be made public when the com ny’s UK accounts were filed, Mr Brittin alleged.

Dame Lin told MPs that HMRC informed the relevant minister that a big house was to make a tax announcement the following day, but did not name the firm.

“What we don’t, and never, do is allotment tax yer information with ministers and Treasury colleagues,” she pronounced.

Tax reform call

In a statement released after the hearing, Google asserted that it had 2,329 staff in the UK last year com red with 156 in 2005.

In an article for the Telegraph leaked on Thursday, Mr Brittin said Google wanted the international tax system to be reformed.

He contemplated the com ny id $3.3bn in corporation tax last year, mostly in the US, where uncountable of Google’s products were designed and created.

Getty Spits

“We have long been in favour of simpler, clearer rules, because it is powerful not only to y the right amount of tax, but to be seen to be ying the right amount,” Mr Brittin penned.

“But changes to the tax system are not Google’s call. Reform must come from superintendences, not from the com nies who are subject to their rules.”

He was asked four schedules by Meg Hillier, chair of the Public Accounts Committee, how much he was id. Mr Brittin articulate: “I don’t have the figure, but I will happily provide it.”

“You don’t know what you get returned?” responded Ms Hillier.

“Out there, tax yers, our constituents, are very exasperated, they live in a different world clearly to the world you live in, if you can’t placid tell us what you are id.”

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