As published on inews.co.uk, Wednesday 21 April, 2021.
Google paid just £50m in corporation tax last year despite posting revenues of £1.8bn, accounts for the tech giant’s UK subsidiary show.
The £50m tax payment comes as employees in the UK were collectively handed almost £1.25bn in pay and bonuses and follows years of controversy around the company’s tax arrangements.
According to a filing with Companies House, Google UK’s revenues increased by £206m to £1.8bn for the 12 months to June 30 last year. Profits increased from £182m to £226m.
The British arm of the technology company said in accounts filed on Wednesday that its total wage bill rose by almost £200m for the year, as it handed out bonuses in the form of shares on top of already substantial wages.
The increase means the average employee at Google’s UK arm took home more than £240,000 including bonuses during the year to the end of June. The group employs 5,124 staff in the UK.
Alex Cobham, chief executive of the Tax Justice Network, said: “Google’s accounts once again confirm the failure of international tax rules to put multinationals on a level playing field with domestic businesses. Despite the UK providing significant growth for the company’s global sales and employment alike, the resulting taxable profits remain pitiful.”
Google’s UK operation is primarily used as the marketing and sales division of its European operation, which is headquartered in Dublin, where taxes are lower.
The Government has attempted to crack down on the use of profits and cash being shifted to countries with lower tax levels, and has introduced a 2 per cent digital service tax.
Mr Cobham said: “The UK government needs to use its upcoming chairing of the G7 group to get right behind the Biden administration’s proposal to impose a minimum effective tax rate of 21 per cent or higher on all multinationals, and to ensure that the undertaxed profits are apportioned back to the countries where the companies have their real economic activity.”
A Google spokesperson said: “Our global effective income tax rate over the past decade has exceeded 20 per cent of our profits, in line with average statutory tax rates.
Approximately 80 per cent of that tax has been due in the US, where Google was founded and where most of our products are developed.”