Google should pay much more in UK taxes, says top shareholder

File photo dated 16/05/13 of a view of a Google search window, as one of the internet giants biggest British shareholders has called on the company to pay "much more" in British taxes. PRESS ASSOCIATION Photo. Issue date: Thursday January 28, 2016. As Google defended its �130 million deal with the Government, James Anderson - whose Scottish Mortgage Investment Trust owns �120 million of shares in Google's parent company, Alphabet - said it was in the company's own interest to pay a "decent" rate of tax. See PA story POLITICS Google. Photo credit should read: Nick Ansell/PA Wire

File photo dated 16/05/13 of a view of a Google search window, as one of the internet giants biggest British shareholders has called on the company to pay "much more" in British taxes. PRESS ASSOCIATION Photo. Issue date: Thursday January 28, 2016. As Google defended its �130 million deal with the Government, James Anderson - whose Scottish Mortgage Investment Trust owns �120 million of shares in Google's parent company, Alphabet - said it was in the company's own interest to pay a "decent" rate of tax. See PA story POLITICS Google. Photo credit should read: Nick Ansell/PA Wire

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One of Google’s biggest British shareholders has called on the company to pay “much more” in British taxes.

As Google defended its £130 million deal with the Government, James Anderson - whose Scottish Mortgage Investment Trust owns £120 million of shares in Google’s parent company, Alphabet - said it was in the company’s own interest to pay a “decent” rate of tax.

His comments came after a furious Commons row over Google’s settlement with HM Revenue and Customs covering the past 10 years.

Mr Anderson told The Times that Google and other international companies accused of failing to pay their fair share of tax would earn respect if they agreed voluntarily to contribute “much more”.

“My take remains that it is in the long-term interests of Google and others of that ilk to pay decent rates of tax and that they and others would be best served in taking the lead in volunteering,” he said.

“They are beneficiaries of state spending at many levels and in return they would get respect.”

Google has also hit out at the coverage of its deal. In a letter to the Financial Times, Peter Barron, Google’s vice president of communications and public affairs, claimed there had been little discussion about “the international tax rules and how they work”.

He wrote: “As a US company, we pay the bulk of our corporate tax in the US: 3.3 billion dollars in the last reported year. What should Google pay in the UK? We pay tax based on the value added by the economic activity of our staff here, at the current standard rate: 20%.

“After a six-year audit we are paying the full amount of tax that HM Revenue & Customs agrees we should pay, including £130m in additional back tax.

“Governments make tax law, the tax authorities independently enforce the law, and Google complies with the law.”

At Prime Minister’s Questions on Wednesday, Prime Minister David Cameron disputed claims that Google’s settlement with HMRC meant it was paying a tax rate of just 3%.

He angrily attacked former Labour ministers - including Tony Blair, Gordon Brown and Alistair Darling - for allowing the company to get away with paying no taxes for years.

Labour leader Jeremy Corbyn, however, complained that under the Conservatives there was “one rule for big multinational companies and another for ordinary, small businesses and self-employed workers”.

The Government also came under pressure from Brussels, with French MEP Eva Joly, vice chairwoman of the Special European Parliamentary Committee on Tax Rulings, calling for Chancellor George Osborne to face questions about the “very bad deal”.

Downing Street, meanwhile, sought to play down reports that France and Italy had succeeded in securing far tougher settlements with Google.

“My understanding is that the French and Italians have said how much tax they would like Google to pay. Let’s see what is actually paid. I’m not sure if any tax has been paid in those countries,” a No 10 source said.

“The situation here is that HMRC has actually been paid, and this is money that should have been paid under a Labour government.”

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