Tax

Google UK pays £44m in corporation tax as revenues reach £1.6bn

Google UK reported revenues of £1.6bn last year according to documents filed with Companies House, despite only paying £44m in corporation tax

During the full-year period ending 30 June 2019 Google’s UK subsidiary saw revenues increase by £193m compared to the previous year. However, its profits were relatively flat at £182m compared with £181m in 2018. 

Google said the profit performance was due to an increase in costs of hiring an additional 800 members of staff. 

Google has come under further criticism for its corporation tax contribution which is actually down from the £66m it paid in 2018. 

Paul Monaghan, chief executive of Fair Tax Mark, told The Times: “Once again, it seems like Google are writing their own rules in the UK. Income is up but corporation tax charges are down. That’s before we get to the puzzle of how they continue to get away with booking so little of their UK advertising revenue through their UK subsidiary.”

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However, according to Miles Dean, head of International Tax at Andersen Tax UK, the criticism of Google and its lack of tax contribution is “far too simplistic”. 

He said: “It’s as if campaigners and MP’s have been living in a parallel universe since the great post global financial crisis tax debate of yesteryear. The focus should never simply be on the amount of corporation tax a multinational pays, because that is far too simplistic. There are many other taxes that a multinational corporation pays, or generates, such as PAYE, VAT, business rates, NICs and so forth.

 “The share awards alone will contribute significant income tax from the employees and employees will have more money to spend, generating VAT.”

 He added: “The claim that Google is writing its own tax laws is puerile. Either the Tax Justice Network are blissfully unaware of the complexity of the tax rules applicable to the likes of Google, or they simply choose not to properly engage with this. If they did properly engage, they would see that Google’s contribution to the economy is much more than its corporation tax bill. 

“They would also see that Google has a choice where it bases its European sales operations – Ireland – and that those functions are genuinely carried on from there. They would also acknowledge that Google is spending £1bn on its KX ‘Landscraper’ HQ, generating employment for 1000’s of employees and countless third parties.”

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