MP brands Google boss as devious over tax evidence

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Google was branded devious, calculating and unethical as furious MPs stepped up pressure on the internet giant over its efforts to shelter its multi-billion profits from UK taxes.

At a stormy session of the Commons Public Accounts Committee (PAC), members reacted with incredulity to claims the company – which paid just £6m in corporation tax in 2011 – did not carry out advertising sales in the UK, despite generating more than £3bn a year in revenues.

Vice president Matt Brittin, Google’s head of operations in Northern Europe, insisted he stood by evidence he gave last year that all the company’s European sales were routed through its operation in Ireland and so were not liable to UK taxes.

But Mrs Hodge accused him of “devious, calculated and, in my view, unethical behaviour in deliberately manipulating the reality of your business in order to avoid paying your fair share of tax”.

Earlier, Mrs Hodge – who also strongly criticised the performance of HM Revenue and Customs – said the committee was also considering recalling Amazon to give evidence following the disclosure it paid just £2.4m last year in UK corporation tax, despite sales of £4.2bn.

There was further embarrassment for HMRC when a High Court judge ruled a “sweetheart” deal with bankers Goldman Sachs had been procedurally flawed, even though it was not unlawful.

It also emerged that coffee shop chain, Starbucks, has yet to hand over the £20m voluntary tax it announced it would make last December. A spokesman said talks with HMRC were “ongoing”.

Mr Brittin, who appeared before the PAC in November, was recalled after the committee was contacted by what Mrs Hodge called a “stream” of whistleblowers challenging his evidence.

She said one had provided documentation showing when Google began operating in the UK in the early 2000s, the “entire trading process and sales process” took place in the UK. Customers included Amazon, BT, eBay, Argos, Halifax, British Airways, Land Rover and Lloyds TSB.

She said the committee had also been contacted by a senior UK salesman who was paid a “modest” salary, but who received three or four times that in commission for sales and for “closing deals”.

“I think you should think really carefully about what you said to us,” she said.

Mr Brittin acknowledged Google staff in the UK were involved in encouraging clients to spend money with the company, but insisted they did not handle transactions. “I stand by everything I said last November,” he said.

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