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Google pays up

They say that the tax man eventually catches up with you, and the time has come for Google to admit defeat – at least a little bit!

Long accused of avoiding paying any tax in the UK, Google has angered many UK residents by dodging tax, as its European sales are all channelled to the tax haven of Bermuda. Google claims that since all its code work is done outside of the UK, it does not operate here, and therefore shouldn’t be subject to tax. Back in 2013, Google faced a parliamentary committee, when asked to defend itself after it emerged that despite these claims, it had “hundreds of UK salespeople”.

Google has now agreed to pay HMRC £130 million, covering the ten year period from 2006, and has promised that in future, it will calculate the payments it should make to HMRC in an entirely different way, more in line with UK methods than those used in Ireland, where it has its European offices.

The Labour party have called the payback amount “derisory”, and even David Cameron seemed to acknowledge that Google had got away lightly, stating that although it was a step forward, there is more to do to ensure that big companies pay their fair share.

If you want to make sure that you’re fully complying with taxation rules for business, get in touch with CWR Accountants. We advise on business and capital tax, and your initial consultation will always be free of charge.

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