Google's Eric Schmidt to meet with David Cameron at height of new tax row

UPDATE (18/05/13): Downing Street has confirmed that Google executive chairman Eric Schmidt will meet with prime minister David Cameron next week. Number 10 insists that the Monday meeting has been in the calendar for some time and is not a snap response to the latest tax row the Internet search giant finds itself embroiled in. It is, we are being told, a routine quarterly meeting of the prime minister's Business Advisory Group. Will the corporate tax arrangements of multinational firms be on the agenda?

Google is back at the centre of a tax avoidance storm, with fresh evidence from whistleblowers appearing to reveal that the search giant's UK employees are closing sales - a practice that means the firm is liable to be taxed in full by HM Revenue & Customs.

Recalling Google MD for the UK and Ireland Matt Brittin for further questioning, chair of the public accounts committee Margaret Hodge (pictured, top) said that the Internet superpower is behaving in a "devious, calculated and, in my view, unethical way" as it continues to avoid paying tax in Britain.

"You are a company that says you 'do no evil'. And I think that you do do evil," Hodge said.

The renewed allegations hinge on claims made by a former Google UK staff member, who has told MPs that he had earned significant bonuses by "selling and closing deals" - a power Google has previously said lies firmly with Google Ireland.

Brittin denied allegations that the company had previously misled parliament when Google's tax record was questioned in November 2012 and insisted that employees for Google UK did not have the authority to seal deals and all transactions were closed in the Emerald Isle.

"Calling someone a 'sales rep' is not the issue here," he said. "The UK team are selling, but they are not closing...People here [in the UK] cannot sell what they don't own."

The controversy piles the pressure on Britain's Prime Minister, David Cameron, who is being urged by some to strike off Google chairman Eric Schmidt as a senior business advisor to the government as a signal of his commitment to tackling corporate tax dodging.

Hodge added: "If I was David Cameron, I would consider Eric Schmidt's position."

Back in April, Schmidt defended Google's UK tax record in an interview.

Amazon is also facing fresh attacks, after a Guardian investigation showed the online retail juggernaut also carrying out key commercial activities in the UK - and thus being liable to pay taxes.

"I did millions of pounds of sales to Amazon. All buying and marketing was negotiated and run through Slough. I never heard anything from Luxembourg," a music publishing executive told the respected newspaper.

A spokesman for Amazon has refuted the allegations: "Amazon pays all applicable taxes in every jurisdiction that it operates within."