Google bosses are to be hauled in front of the Treasury Select Committee to explain why the company pays so little income tax, after it emerged that it coughed up only £6m to the Exchequer on UK revenues of £395m.
Google’s British operation is run as an agent of its Irish subsidiary, meaning it only pays tax on 10% of its earnings. The rest of the money is channelled via another subsidiary registered in Bermuda, avoiding tax.
Now, John Mann, a Labour member of the Treasury Select Committee, plans to call Google executives to account before the Committee.
He said: “It is entirely immoral, this is a company avoiding its obligations and we are letting them get away with doing it.
“I think it would be highly appropriate to pull a Google executive in front of the Committee to justify their failure to pay proper taxes, we would be looking at covering the issue in this parliamentary session.”
Google executive chairman Eric Schmidt has previously defended the company’s UK tax affairs.
“We could pay more tax but we would have to do so voluntarily,” he said. “It’s very good for us, but to go back to shareholders and say ‘We looked at 200 countries but felt sorry for those British people so we want to [pay them more]’ … there is probably some law against doing that.”
Although not illegal, Mann said the Treasury Select Committee should investigate such schemes.
“This sort of scheme is running, meanwhile we are providing a legal base and defence for Bermuda because it is a British dependency,” he said.
A Google spokesman said the firm abides by all tax laws.
“We make a substantial contribution to the UK economy through local, payroll and corporate taxes,” he said.
“We also employ over a thousand people, help hundreds of thousands of businesses to grow online and invest millions supporting new tech businesses in East London. We comply with all the tax rules in the UK.”
Meanwhile, pressure group 38 Degrees is setting up an online petition in an attempt to get the matter discussed in Parliament.
