Google UK Avoids Paying £450 Million Every Year

The California-based search engine giant, Google, has been accused of avoiding payment of the corporation tax on the money which it generates in UK through advertising.

The company reportedly siphons its UK revenue through its European headquarters in Ireland, which apparently levies less corporation tax than the UK.

Google Inc, which controls 90 percent of Britain’s search engine market, generated £1.6 billion in advertising revenue last year of which £450 million corporation tax was never paid by the company.

It has been reported that according to the accounts filed by Google UK, advertising revenues generated from British customers were never mentioned in the account books as it was found that all the revenue was transferred to its Ireland subsidiary.

Interestingly, Google Inc’s annual report indicates that out of the $21.5 billion generated in revenue, almost 14 percent came from the UK, making it the largest revenue field outside the US.

The accounts filed by the company mention that the ‘principal activity’ of its UK subsidiary is to provide marketing services for Google Ireland and perform research and development activities for its parent company in the US.

It seems that for a company which is built on the motive of ‘Don’t be evil’, this tax-evasion controversy is a huge blow to its reputation.

Our Comments

That's nasty; depriving the economy of a whopping £450 million is quite significant. You could easily build a hospital or half a dozen schools with that kind of money. Now multiply it by the number of multi national companies resorting to those tricks and you have a fair idea of the billions that are actually being taken away from the Chancellor's balance sheet.

Related Links

Google: Do no evil, pay no tax

(The Register)

Google accused of avoiding tax on £1.6billion advertising earnings


How Google avoided a British tax bill of £450m

(Daily Mail)

Google's subsidiaries allow company to avoid £450m tax on UK advertising