MPs urge taxman to go after Google

HM Revenue and Customs (HMRC) is urged to “fully investigate” Google which is accused of taking “elaborate” steps to avoid UK corporation tax by the Public Accounts Committee (PAC).

Alongside its tax arrangements, Google has also been under pressure to do more to restrict access to images of abuse and violent pornography and yesterday it gave £1m to the Internet Watch Foundation charity.

PAC chairwoman Margaret Hodge described Google’s argument, that while it has substantial UK operations its deals are legally concluded in Ireland, as “deeply unconvincing”.

“The company’s highly contrived tax arrangement has no purpose other than to enable the company to avoid UK corporation tax,” she said.

“Google’s reputation has been damaged by these revelations of aggressive tax avoidance. That damage will not be repaired until the company arranges to pay its fair share of tax in the country where it earns the profits from the business it conducts.”

Mrs Hodge added that it was “extraordinary” HMRC had not done more to challenge Google.

Her committee’s report calls on the Government to strengthen HMRC and simplify the tax rules to make it harder for companies to exploit loopholes.

A Google spokesman said: “As we’ve always said, Google complies with all the tax rules in the UK, and it is the politicians who make those rules.

“It’s clear from this report that the Public Accounts Committee wants to see international companies paying more tax where their customers are located, but that’s not how the rules operate today. We welcome the call to make the current system simpler and more transparent.”

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