Google: Big Time Tax Avoider, and Getting Bigger by the Year (£187 Million in UK in 2009)
May 31st, 2011
The Sunday Times did an expose of Google’s tax affairs Sunday.
I’ll declare an interest: they asked me to help the investigation, and I did.
The findings? Google has avoided £3 billion of tax worldwide over the last five years. It’s tax rate outside the USA is just 3%.
In 2009, if Google had declared profits in proportion to sales in the UK in the ratio that the worldwide accounts showed (about 35% profit pre tax) then the expected UK tax bill would have been about £190 million.
They actually paid £3 million.
Now if that isn’t evidence that a) Google does harm even if all it does is legal b) Google is not corporately socially responsible c) Google condones the massive worldwide tax avoidance industry d) H M Revenue & Customs’ estimate of the tax gap is nonsense as they would not pick up this difference in their calculations, meaning that they drastically underestimate the tax gap, as I have always claimed.
It’s annoying that the Sunday Times is behind a pay wall: this latest expose of Google’s tax is further evidence that the issue of tax avoidance is still one that deserves campaigner’s attention.
Update: You can get the Google tax avoidance story – free from The Australian – here.