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Liberal Google Avoids High British Taxes

From the UK’s Times:

Google pays no tax on £1.6bn [$2.6B] in Britain

Google was accused of ‘ducking its social responsibility’

Robert Watts

December 20, 2009

Google, the internet giant whose informal corporate motto is “don’t be evil”, did not pay any tax on its £1.6 billion [$2.6 billion] advertising revenues in Britain last year.

The firm, which has a substantial presence in London, diverted all its advertising earnings from customers in Britain to its Irish subsidiary.

The arrangement allowed Google legally to avoid paying more than £450m [$726 million] in corporation tax to HM Revenue & Customs in 2008, The Sunday Times has established.

The disclosure prompted politicians to criticise Google, widely lauded as a pioneer of the internet age, for “ducking its social responsibility” and for “tax avoiding”.

Accounts filed with Companies House in the past week show Google’s 2008 UK corporation tax bill amounted to just £141,519 [$229,000] — and that was tax on the interest generated by its cash pile in UK bank deposits.

Vince Cable, the deputy leader of the Liberal Democrats, urged the search firm to “pay its fair share” of tax

About 13% of Google’s global revenues now come from the UK, and 770 staff are based at its London offices.

Accountants said that if the firm’s £1.6 billion UK earnings were paid directly into Google UK Limited, the London operation, it would have been liable for UK corporation tax of between 28% and 30%.

This could have raised about £450m [$723M] for the public finances — enough tax to fund three NHS hospitals, buy at least eight Chinook helicopters or pay the annual salaries of about 15,000 policemen.

Any British individual or company who places an advertisement with the search engine pays a fee to Google’s European headquarters in Ireland, where corporation tax is levied at between 10% and 25%.

The Dublin operation’s latest accounts show that only €7.5m (£6.7m) [$10.7M] of Irish tax was paid in 2008, even though the bulk of Google’s €6.7 billion (£5.9 billion) [$9.5 billion] European earnings flowed into Ireland

As well as paying little tax, Google UK Limited’s latest accounts disclose that it made modest charitable donations of just £5,662 [$ 9,100] during the year.

The document also reveals that Google’s highest-paid UK director earned nearly £1.1m [$1.7M] — an 80% rise on the previous year

Google has established strong ties with British politicians in recent years.

Last February, David Cameron, the Tory leader, appointed Eric Schmidt, the company’s chairman, to the Conservatives’ economic recovery committee.

A few months later, Cameron suggested that NHS patient records could in future be maintained by Google.

Pontificate globally, cheat locally.

It is so typical is no longer funny or even amusing.

(Thanks to BillK for the heads up.)

This article was posted by Steve on Monday, December 21st, 2009. Comments are currently closed.

2 Responses to “Liberal Google Avoids High British Taxes”

  1. BillK says:

    New media template: avoiding taxes may be legal, but it’s evil.

    From the Times of London:

    Google Pays No Tax on $2.6B in Britain

    By Robert Watts

    (Times of London) – Google, the Internet giant whose informal corporate motto is “don’t be evil,” did not pay any tax on its $2.58 billion advertising revenues in Britain last year…


    It’s legal, but it’s now “ducking social responsibility” to not pay as high a tax rate as possible.

    Once again, why bother running a business?

  2. proreason says:

    It’s not even hypocracy.

    Liberals are amoral.

    It’s that simple.

    The liberal is first, second and third, always, always, always.

    There have no commitment to community, country, charity, or decency.

    Except for “the words”, of course.

    Which are 100% lies.

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