back to article MPs demand UK rates revamp after Google's 'extraordinary tax mismatch'

British MPs have demanded that the government act to revamp the tax structure after damning revelations about Google's corporate payments structure in the country. The Public Accounts Committee said in a report that Google had damaged both its own and HMRC's reputation with its "highly contrived" tax arrangements, which had …

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  1. Squander Two

    Damaged HMRC's reputation?

    News to me that that was doable.

    1. Squander Two

      Re: Damaged HMRC's reputation?

      Seriously? A down-vote for that? Must be a tax-collector reading.

      1. James Micallef Silver badge
        Happy

        Re: Damaged HMRC's reputation?

        @squander 2 - spot on for the original post, but complaining of downvotes is poor form. So, someone disagrees with you, big f***ing deal

    2. Dave 15 Silver badge

      Re: Damaged HMRC's reputation?

      The quote came from Hodge - whose own company has managed to avoid paying tax by some pretty underhand techniques... pot calling kettle? Nope, she is an MP, therefore quite above being wrong obviously. And the voters, yup, they are so damned stupid they'll be flocking to put their mark next to her name next election, and the one after that... Or maybe - the conspiracy guys might guess - the ballot papers have no effect on the outcome.

  2. Anonymous Coward
    Anonymous Coward

    Yeah, sure..

    .. as if any of the likes of E&Y are going to admit that they're paid to dig for loopholes.

    However, in this case were are not talking about loopholes - we're talking about lying. Google was selling in the UK, and should not only face the bill for that, but also the penalty for attempting to deceive HMRC. If any of us is out by a penny they're happy to haunt you, time to deploy that enthusiasm where it actually provides a return.

    1. Anonymous Coward
      Anonymous Coward

      Re: Yeah, sure..

      EY have a legal obligation to report on any tax loopholes that they come across to HMRC so that these can be acted upon.

      They said they have done so - not sure what else you want them to do?

  3. Gordon Pryra

    The whole charade is a disgrace

    1) HMRC not saying anything when they got the cheque for 16 million.

    2) Google thinking they can just say, "no, we ain't going to pay, we give a few of you jobs"

    3) Some Politions actually backing that 2nd point up in public

    4) Google's blatant lies around the selling of their services

    Perhaps most damning of all

    5) Margaret Hodges own family run company doing exactly the same as Google with the same arguments. but not being investigated by Parliament like the Google circus.

    1. Anonymous Coward
      Anonymous Coward

      Re: The whole charade is a disgrace

      Re: Point 5

      Actually that was a case of a lot of noise being made about the initial accusation and very little being in the papers about the subsequent apologies for having got the facts wrong. Even Private Eye (scourge of this kind of thing) said that actually Stemcor weren't doing anything dodgy, and made the point that they'd spent a LOT of time looking into the accounts to try and find anything.

      1. Anonymous Coward
        Anonymous Coward

        Re: The whole charade is a disgrace

        @AC Re: Point 5,

        If Stemcor weren't doing anything dodgy then Google weren't either. You can't have it both ways!

      2. The Axe
        Flame

        Point 5

        Stemcor aren't doing anything wrong. Nor are Google. But Hodge the Dodge is doing something wrong by attacking a company carrying out a legal activity whilst she herself does the same legal activity. It's called hypocrisy. Hodge is using a trust to avoid her children having to pay inheritance tax. A trust set up by her father specifically to avoid tax. It is true that currently no inheritance tax is due for unlisted family run companies like Stemcor, but it was not true when the trust was set up. Hodge is just grandstanding as chair of the PAC, lots of shouting but no action because no action is possible as everything is legal. She shouts a lot because she is a champagne socialist who just doesn't like it that everyone else is being taxed to the hilt to pay for all the voters that she would like to bribe with benefits.

        1. Ian Johnston Silver badge
          WTF?

          Re: Point 5

          Didn't the Milliband boys use a trust to deal with the estate of their late, socialist father?

    2. Paul Shirley

      Re: point 2

      point 2: if government after government had spent less time enticing internationals to set up shop in blighty by offering not to tax them, maybe those internationals wouldn't take them up on the offer.

      Politicians have spent decades saying we'll liberally reward anyone that brings collateral benefits, set up taxation to do it, trained HMRC to implement the ensuing free for all. Too fscking late to dodge the blame, politician monkeys did it, politician monkeys need to fix it. Only then do they get to blame others.

      1. Bronswick

        Re: point 2

        Agree, but unfortunately politician monkeys know that they can do whatever they like because voter monkeys do not base their votes on the politician's performance.

        Ultimately we are to blame.

  4. Shasta McNasty
    Meh

    FFS

    Margaret Hodge needs a hobby.

    1. Matthew 25

      Re: FFS

      I thought she had one :D

      1. Shasta McNasty

        Re: FFS

        Margaret Hodge needs a *new* hobby </corrected>

  5. g e
    Holmes

    "pay its fair share of tax" - @ the goalpost-moving politicians:

    Wrong. They do. You clowns set the laws under which they pay that.

    Sort your shit out and they will continue to comply with the laws you set.

    1. sabroni Silver badge

      Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

      Um, no. They lied to the committee by claiming they did their selling in Ireland but whistle blowers from their own company showed that they were selling in the UK.

      1. Flocke Kroes Silver badge

        If you have evidence, take it to HMRC

        Whistle blowers talking to newspapers have as much credibility as an MP's expenses claim. The HMRC have what it takes to take what you got. Give them some real evidence that Google have broken the law, and they will get taxes and a hefty fine out of Google. As we have seen Margaret Hodges is not an expert on tax law or investigating tax evasion. She has publicly harangued a few Google executives, but she has not got a conviction against Google for tax evasion. The only reputation she has damaged is her own.

        1. ratfox Silver badge

          Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

          I'm not sure it matters where the "selling" is done. European law seems to allow companies to pay tax in a single country, no matter where the "selling" is done. What matters is which country is on the bill. This was very explicitly meant to be a feature of European tax laws, and not a bug: It means that you can sell in many countries without the hassle of paying taxes in each of them.

          Google may have been wrongly claiming that sales were happening in Ireland, but this is probably just for saving appearances; the fact is that they are allowed to pay taxes wherever they want.

          You may go to a travel agency to buy a plane ticket; you may get convinced by the travel agency to buy a certain ticket; you may never talk to anybody from the airlines company. Yet, the ticket you buy is still a British Airways ticket, not a Kuoni one, even though Kuoni did the selling. The travel agency only pays taxes on the commission they get, which has nothing to do with the amount the airlines company earns.

        2. Naughtyhorse

          Re: If you have evidence, take it to HMRC

          given that google have claimed that the people in the uk weren't involved in sales OR development.... what the fuck were they doing?

          1. Don Jefe

            Re: If you have evidence, take it to HMRC

            Pre-sales, customer education, regional sales kit development and market analysis would be my guess. In most settings the individual who closes the deal is the salesperson, regardless of who else may have assisted in the run up to the consummation of the deal. That's a pretty standard arrangement, it looks like Google just took it to extremes and maximized the definition of the word sale.

      2. Anonymous Coward
        WTF?

        Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

        > but whistle blowers from their own company showed that they were selling in the UK.

        Showed a court?

        Sure?

        I'd love to see some actual evidence.

        And if it is true, then why aren't Google being prosecuted?

        1. Anonymous Coward
          Anonymous Coward

          Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

          I can tell you know I've been sold to by Google in both the UK and Ireland. In Ireland as recently as two weeks ago, in the UK twice in the last year at their offices in St. Giles. Google UK staff pitch products to UK corporates daily. Its ridiculous to suggest otherwise.

    2. Anonymous Coward
      Anonymous Coward

      Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

      Surely even the most strident person arguing that "it's all legal, therefore it's OK" can't argue that avoiding as much tax as possible, within the law, is also "paying their fair share". The whole point of this sort of tax avoidance it to not pay their fair share, the defence of it is that it's legal, I've not seen anyone argue it's moral or fair.

      1. Squander Two

        I will.

        Always remember that "shareholders" means, for the most part, our pension funds. More tax for the state now means less pension for us later. A bit of tax surely has a very small effect on my final pension, but then a lot of tax has sod all effect on how wonderful a utopia I get to live in now.

        I'm not convinced tax is any more or less moral than paying shareholders.

        Course, Apple are avoiding both.

      2. Ken Hagan Gold badge

        Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

        "...I've not seen anyone argue it's moral or fair."

        OK, I'll bite. The loopholes exist because at some point Parliament decided that the system would be *fairer* if an exemption was permitted in specific cases. We call those loopholes. Creating them required more effort than just having a flat rate. They would not exist if MPs didn't think they were fair.

        1. The Mole

          Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

          Where there is a clear exemption that Parliament decided then that isn't a loophole. A loophole is where some accountant/lawyers takes and/or combine the exemptions and use them in a way that was never intended by parliament

          1. fajensen Silver badge
            Flame

            Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

            ... and use them in a way that was never intended by parliament

            The intent of parliament is expressed as laws, if parliament makes laws that parliament does not understand the consequences off then there is a problem somewhere. That problem may be easily resolved by parliament making better, simpler, more transparent laws that parliament *can* understand.

            Some may get the impression that "the intent of parliament" was to let lobbyist, lawyers, cronies and special interests write the laws for parliament to rubber-stamp - and now parliament wakes up with a sore bum and feels violated.

            If that is the case, a settlement will be the outcome, not changes in the process or the legislation.

        2. Alan Brown Silver badge

          Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

          And it's all those bloody loopholes which mean HMRC employs 3 times more staff than it should need ti (well that and the usual civil service featherbedding which goes on)

          There are 2 issues with collecting tax - one is the gross income and the other is the cost of collecting it.

          It's possible to _reduce_ gross income and still come out on top if the expenses go down by even more. That's been amply demonstrated in a number of countries.

        3. Anonymous Coward
          Anonymous Coward

          Re: "pay its fair share of tax" - @ the goalpost-moving politicians:

          @Ken - Not quite - A loophole is something which is unintended, that's what the word means. There may well be a particular situation where an exemption is intended, but this isn't a loophole, because it's intended. By definition someone using a loophole to avoid tax is behaving within the letter of the law, but not its intention.

  6. Alan Denman

    Exactly the same elsewhere !

    So with Apple paying no tax in Briatin and Eire I'd suggest th politicans get real and stop petty charade doomed to fail.

    It is getting quite scary when they move point scoring away from the false inter party banter !

    It is your laws guys, you are the ones to blame.

  7. This post has been deleted by its author

  8. Anonymous Coward
    Anonymous Coward

    Politicians make the tax rules

    So Margaret Hodge is quick to blame the corporations and HMRC, but ignores the fact it's the politicians that make the rules (supposedly). If the crime rate goes up, we don't blame criminals we blame the policy makers. The same should go for corporate tax avoidance.

    Politicians are deluded if they think "doing the right thing" even remotely exists in the corporate psyche. They know that corporations are run by money, not moraility, and if politicians want to moan about the corporate tax arrangements then they should take a long hard look at themselves before blaming anyone else.

    1. Anonymous Coward
      Anonymous Coward

      Re: Politicians make the tax rules

      " If the crime rate goes up, we don't blame criminals "

      Err, yes, we do. Then we prosecute them and if appropriate bang them up. That policy makers may be able to help stop crime doesn't mean that we don't blame criminals for the crime they do.

  9. Alan Denman

    And this new perception simply does not hold up in court

    You ain't marketing to sheep here guys.

    This likely perceptional bullshit is for selling, not the law courts.

  10. Bod

    Obligations to pay tax

    MPs can jump up and down all they like (though they're only doing it due to public/press pressure). You only ever pay the tax legally required and have no obligation to do anything otherwise. What is legally due *is* their fair share, not what people think you should morally pay. HMRC is not a charity and you are a fool to volunteer tax that is not due, not to mention damaging shareholder's interests. I'd quote Lord Clyde yet again, but I'll leave that to a Google search.

    They just need to propose a change to the law, and it should be simple, open and fair, applying to everyone equally.

    Oh wait, that mean's they'll get shafted in their own avoidance schemes ;)

  11. Bod

    Double standards

    What gets me is the rants about Google, Amazon, etc, and yet the gov has been quite happy to provide massive tax breaks to Hollywood to encourage them to shoot the likes of the new Star Wars films and yet that is effectively a sanctioned tax avoidance scheme as after all they're not paying their so called "fair share" are they? ;)

    1. Anonymous Coward
      Anonymous Coward

      Re: Double standards

      That is the whole point - The government advertise some methods of reducing your tax, they tell people/companies about them and invite them to use them. I am a tax avoider, I have Premium Bonds and an ISA. I have these products because the government wants me to have them. I don't arrange for my pay to be put into an offshore umbrella company who pay me minimum wage and then make me a series dividend payments (or however it works) because it's obviously not what the system is intended to do.

    2. P. Lee Silver badge
      FAIL

      Re: Double standards

      What gets me is that the HMRC is quite open about its own double standards.

      "Employment law and tax law are not related." Employee A is deemed to be working for Company B when it comes to Employee A's tax, but not when it comes to Company B's tax or employment benefit obligations.

  12. AndrewG
    WTF?

    So whos going to do business in England?

    1. Be an international corporation and have a tentacle in Britain

    2. Pay your taxes according to the law

    3. Get told thats not good enough, suffer reputational loss, bad press, etc.

    4. Close up shop, and move all the jobs to somewhere where your not a punching bag for thieving politicians and their over-endowed sense of entitlements

    With crap like the politicians are spewing, why in God's name would anyone bother when they can just plant themselves in business friendly Luxembourg or somewhere?

    1. BoldMan

      Re: So whos going to do business in England?

      point 4 is irrelevant because the UK is a large enough market that they would hurt their own business by pulling out. This excuse has been used before by the City to try to justify leaving their enormous bonuses untapped, but its a straw horse as there are plenty of other reasons why the companies and people CHOOSE to stay in the UK even if they have to pay more tax.

    2. sabroni Silver badge

      Re: why in God's name would anyone bother?

      Because there's plenty of money to be made here? Even after tax? They made 18 billion in five years, they could lose a good chunk of that and it'd still be worth doing. It's all about the bottom line, they won't give up on 10bn just because they think it should be 18bn....

      1. SkippyBing Silver badge

        Re: why in God's name would anyone bother?

        That's £18 Billion turnover they're making, not profit, what they're making could be any number between 0 and 18 Billion.

        To answer your more general point, if it costs you, for example, £9 Billion to make £1 Billion profit in the UK but you could make £2 Billion with it in another country where would you invest your £9 Billion?

        1. Andy Fletcher

          Re: why in God's name would anyone bother?

          You know that's rubbish right there. The company would spend the $9b in both and make $3b. No-one walks away from $1bn in profits no matter how loud they cry that they would.

          I'm with the "just abolish it" crowd on corporation tax. They can't fix it and they know it so just stop doing it. UK businesses can stop suffering this completely unfair system. Google won't need to offshore, so ther'll be more jobs here - where they should be - serving the UK market.

    3. Anonymous Coward
      Anonymous Coward

      Re: So whos going to do business in England?

      Ah, the old "tax is theft" argument, how very Ayn Rand of you. Closely followed by "all the business guys and smart people will leave" have you just finished Atlas Shrugged, or are you half way through it?

    4. Fink-Nottle

      Re: So whos going to do business in England?

      4. Close up shop, and move all the jobs to somewhere

      An empty threat, if you believe Google's protestations that they don't have a shop here in the first place.

      1. Gannon (J.) Dick
        Pint

        Re: So whos going to do business in England?

        But if you Google it you'll find it's also a stupid threat, a meaningless threat, an irrational ... wait, you're from Ireland, right ? No! ? Ok, empty it is then.

    5. Uffish
      Facepalm

      Re: So whos going to do business in England?

      People who don't want to live in Luxembourg.

    6. streaky
      Holmes

      Re: So whos going to do business in England?

      "2. Pay your taxes according to the law"

      This is fairly murky water given evidence suggests Google probably hasn't been paying tax according to the principle or wording of the law. If you make a profit in the UK you're supposed to pay tax on those profits - it's that simple. If you using dodgy accounting practices and lie to parliament and the HMRC over this stuff at best you're sailing close to the edge.

      Google says it makes no profit in the UK, which everybody thought was pretty silly and then subsequently a huge pile of fairly believable evidence surfaced suggesting Google were being worse than economical with the truth, in the same way as Apple were being economical with the truth over either their Aussie pricing practices or their US taxation practices.

      The argument that Google employs a few people and pays NI and some income tax (though that's probably worth taking a long hard look at anyway) so we should leave them alone is pretty damn silly - because so does every other employer - it's one of the the costs of doing business, and funny story, it's a before-profit cost - and it's not actually that many jobs.

  13. g e
    Pint

    What about an import tax then

    Now I'm no accountant, as my accountant knows all too well, but seeing as these 'profits' are being eaten up by 'paying for stuff' from a parent/sibling company in a different tax domain, then presumably these 'purchases' the UK-based laundering operation makes to the elsewhere company are imports. Kinda like Hollywood accounting but cross-jurisdiction.

    Therefore create an import good class of 'dodgy sibling company purchase' and tax the FUCK out of it, no?

    Should I be in Whitehall instead billing £1500/day for coming up with shit like this for some working committee?

    Pint for everyone as it's Friday.

    1. Arion

      Re: What about an import tax then

      > Therefore create an import good class of 'dodgy sibling company purchase'

      Before you pitch this lead balloon any further, you might want to check up on The EU single market, and its laws regarding excise duties.

  14. Andy Roid McUser
    Coffee/keyboard

    Tax avoidance via a technicality

    The technicality allowing Google to pay little or no consequential tax in the UK is quite frankly nonsense. If HMRC want to start collecting from corporations they either have to move away from GPT, as profits are offset against expenses ( see Starbucks UK having to pay high licensing costs to Starbucks Bermuda ( or somewhere similar ) and thus operate with a loss in the UK despite £1.8 Billion in sales ) and simply change corporation tax to be based on turnover instead of profits.

    It's far from that simple , I'm not a banker / Accountant but as far as I see , as long as corporation tax is based on Profit , there is nothing to stop any company having to pay 'fees' to an off-shore subsidiary and thus consistently run their UK arm at a loss despite massive sales ( Starbucks, Amazon , Google, Apple and possibly many small businesses also )

    I don't know what the solution is but the politicians either need to be frank to the public that we're OK with the large employers paying no tax because they create private sector jobs, or devising a solution that if you want to operate in the UK and you're tax base is elsewhere then you face a turnover tax instead ( or something ).

    1. Fink-Nottle

      Re: Tax avoidance via a technicality

      Overly high licensing costs to an offshore parent are an example of transfer pricing and the HMRC should apply the arm's length principle to such transfer pricing transactions.

      (They compare transaction costs between connected parties to the pricing of the same transaction if it had been executed by unconnected parties - parties at 'arm's length', so to speak - and woe betide you if there's a massive difference.)

      If a loophole exists in transfer pricing legislation, then it is just a technicality and an amendment to HMRC rules should should not be that difficult - even for Westminster.

    2. ShortLegs
      FAIL

      Re: Tax avoidance via a technicality

      You really haven't thought that idea through, have you.

      You can't tax solely on turnover. Let me put it in simple terms. If my profit margin is 10% (I buy widgets at 90p and sell at £1), where does the extra 12p per widget come from to pay tax at 22%? If I sell 1000 widgets, I make £100 profit. If I have to pay £220 profit, where do I find the extra £120?

      Then, where do I find the money to pay for business expenses (electricity, rent, etc), staff salaries, and NI?

      Fail.

      1. Anonymous Coward
        Anonymous Coward

        Re: Tax avoidance via a technicality

        "You can't tax solely on turnover. Let me put it in simple terms. If my profit margin is 10% (I buy widgets at 90p and sell at £1), where does the extra 12p per widget come from to pay tax at 22%? If I sell 1000 widgets, I make £100 profit. If I have to pay £220 profit, where do I find the extra £120?"

        Obviously a turnover tax would not be levied at 22%. Duh.

      2. Don Jefe

        Re: Tax avoidance via a technicality

        If you're selling anything at 10% margins you're either doing it horribly wrong or better be selling a whole, whole lot of it.

  15. The BigYin

    So...

    ...are the MPs stating they have evidence of Google committing a criminal act? i.e. breaking tax law? yes? To the courts!

    Oh wait, they're not. They are flapping their gums and trying to sound good.

    Who wrote the laws?

    Not me, not you; but the muppets who are now engaged in damage limitation.

    1. Richard Wharram

      Re: So...

      No. The implication is that they ARE breaking the law by lying about where the sales actually take place.

      I'm not qualified to judge the veracity of the claim myself.

      1. Squander Two

        You're both right.

        Yes, the allegation is that Google lied, so some of their tax avoidance might be tax evasion. But that's only one small part of what Hodge is complaining about: mostly, our MPs are angry that companies are obeying the law.

        1. Anonymous Coward
          Anonymous Coward

          Re: You're both right.

          @Squander Two: No, the MPs are angry that these massive companies appears to be taking the piss out of the law.

          1. billse10

            Re: You're both right.

            @AC to a point: maybe they're really angry because of course taking the piss out of the law is what MPs are for.

  16. Spider
    Unhappy

    it makes little difference in the long run

    no company ultimately actually pays any tax.

    it's customers do.

    1. Don Jefe

      Re: it makes little difference in the long run

      The actual costs of corporate taxes may be passed on to the consumer, but paying that bill still takes a cut from revenue. The trick is to keep enough money coming in at all times to cover those bills, but even large companies are about two steps in front of serious accounting problems at any given time.

  17. I ain't Spartacus Gold badge

    Slight EU problem

    Because of the Single Market, things get awfully complicated here. The problem here might be that Google could say OK then, if our sales are from Ireland and there's no UK tax, we just sack all our UK advertising sales staff and carry on as before. I'm no tax lawyer, but as I understand it that would be correct. Although it might be worth losing those few jobs for the nice fines and past tax bill we could charge them. Except to the poor sods doing them.

    International tax law is bad enough already, and gets even more complex when you add the EU/Single Market rules on top. We could help a lot by making our tax system simpler. To some extent though we're always going to be working on the 'honours system' with these large multi-nationals. I'm not sure there's going to be much of a way round that, unless all the big economies get together and bring in an international tax system. Which seems pretty unlikely.

    You can threaten to tie up 20 head office staff with a tax audit, then go to court over transfer pricing issues and force big legal costs on them. But when you're talking about hundreds of millions in tax, it's still worth all the hassle that puts you through to avoid it.

    1. Richard Wharram

      Re: Slight EU problem

      Might not be as easy to sell advertising to UK customers though if they have to fly over to Dublin.

      1. Anonymous Coward
        Anonymous Coward

        Re: fly over to Dublin

        Why do you think Google is developing video conference tools?

    2. Tom 38 Silver badge

      Re: Slight EU problem

      The trick is hiring "customer support staff" in the UK, who do everything that an account manager used to do apart from receiving the signed P.O., which goes to the 'sales' staff in Ireland, who do everything that accounts used to do.

      When the papers say "the service industry rebounded this quarter", that's what they are talking about.

  18. Anonymous Coward
    Anonymous Coward

    Frankly I find it impossible to understand how the lazy, incompetant and corrupt HMRC can actually have their reputation lowered?

    Even by Google.

  19. ZanzibarRastapopulous

    Change tax.

    Instead of taxing profits and by extension trying to figure out where it's all come from/gone to, just tax money leaving the business or being moved to another tax regime within the business.

    Problem solved, lots of accountants jobless.

    1. Richard Wharram

      Re: Change tax.

      Also, lots of retailers jobless. Not everyone has the same business model as Google.

      1. ZanzibarRastapopulous

        Re: Change tax.

        Eh? As far as a normal retailer is concerned it would be a sales tax - which already exists.

  20. Anonymous Coward
    Anonymous Coward

    Lucky old Ireland

    Ireland must be making a mint from this - they still charge 12.5% corporation tax!

    Maybe if the UK's rate (currently 20%) was more business friendly then we'd get all the tax paid here that we are owed, and we could get rid of half of HMRC into the bargain (happy days).

    1. Anonymous Coward
      Anonymous Coward

      Re: Lucky old Ireland

      Erm, lucky old Ireland is bankrupt and it's ridiculously low taxes and tax breaks are part of the problem.

    2. Roland6 Silver badge

      Re: Lucky old Ireland

      >Ireland must be making a mint from this - they still charge 12.5% corporation tax!

      Eh? have you not been following the Apple disclosures - I suspect that Google are doing very similar and only pay 12.5% corporation tax on sales physically made in Ireland - the UK sales probably don't satisfy this criteria...

    3. David Evans
      Boffin

      Re: Lucky old Ireland

      You've not been paying attention have you? Google don't pay much tax in Ireland either. Thanks to the "Double Irish" (where Google effectively charges itself for use of its IP), Google hardly makes any actual profit in Ireland, all the money going to the Caribbean (Bermuda I think in Google's case) to pay for the licence. The "profit" is all made in the tax haven.

      Ireland gets a lot of job creation out of its tax regime, but nowhere near as much actual corporate tax revenue as you'd expect

  21. J.G.Harston Silver badge

    Google's an American company, I would expect it to pay tax in America, not the UK.

    1. Anonymous Coward
      Anonymous Coward

      Seriously? That's your contribution?

      I thought some of the other comments totally failed to understand the first thing about this tax law, but you take the biscuit.

  22. Anonymous Coward
    Anonymous Coward

    5 years... Ive paid over 1/4 mill tax in that time as a single UK employee. I think I can see what people get upset about

    1. Anonymous Coward
      Anonymous Coward

      There are plenty of people who WISH they had your problem.

  23. Mole5000

    In the case of Apple they don't make a mint. Due to jurisdictional negotiations Apple undertook with the Irish government back in the day they pay an effective 2%ish tax rate on their European profits as only the Irish part of their profits is actually taxed in Ireland. The rest has no fixed abode and so escapes taxation altogether.

  24. Squander Two

    Common sense?

    Next time HMRC do something absurd to my income, can I tell them Margaret Hodge says they're supposed to use common sense?

    1. All names Taken
      Paris Hilton

      Re: Common sense?

      I'll do that in my next post to them. Previous ones asked for explanation why they assumed income, formed it into a tax demand and did so with full power of the state behind it.

      Perhaps MPs would like to take up a morality clause with HMRC?

      1. Gordon 10 Silver badge
        Mushroom

        Re: Common sense?

        Have to agree with ANT - love the fact that if you get an exceptional personal income in one year HMRC are allowed to assume its going to happen next year and send you an anticpatory demand that you have to pay by law.

  25. All names Taken
    Paris Hilton

    Lost the plot have we?

    I apologise for reading the article quite quickly and not noticing anything to do with morality.

    Surely morally robust assertions of yore need to be featured at least in a sentence or two.

    Unless, of course, to do so would harm some individuals in the UK?

    And even more surely, are we to turn the clock back 1 year, 5 years, 10 years or more and can we have some dirt on UK politicians, civil servants, high earners of public dosh, accountancy firms, auditors and the like embarked upon such "nefarious" and immoral acts?

    (Dear Google - I do apologise for our political overlords lording it up over us mere wage slaves. They seem to get a rush of blood to the head and it makes for all manners of trouble. Look at Iraq or Afghanistan for example?)

  26. Anonymous Coward
    Anonymous Coward

    they blame EVERYBODY

    but themselves - when they're the ones in charge of the law and they're the ones to blame. But hey, let's blame the taxman, that'll earn us a couple of votes. Who likes the taxman anyway? :(

  27. Anonymous Coward
    Anonymous Coward

    "fair share of tax"

    is NOT a legal term and it's NOT binding. They screw the system, and do so - LEGALLY.

  28. OrsonX
    WTF?

    Ethical Tax Practices

    CEO: I don't feel we've payed enough tax to support this faltering economy, lets add a few mill, no, no wait, that's mean and greedy of me, make that 10 mill extra on top of the tax bill.

    1. Anonymous Coward
      Anonymous Coward

      Re: Ethical Tax Practices

      It's not that simple ...

      A multinational like Google is a complex financial beast. There is a huge pyramid of financial transactions and each level of the hierarchy is overseen by an army of bean counters. Unavoidably, each of these bean counters will need to take averages, estimate, simplify and round off when arriving at their end of year tax figure.

      All these individual simplifications add up to a huge wad of cash for the company as a whole - a 'grey area' of corporate finance. The CEO's policy determines how this grey area is treated, how the army of bean counters carry out their calculations. They can be told to they act ethically or squeeze every last bit of profit from the taxman.

      So, yeh, ethical tax practices are possible.

  29. The Axe
    Mushroom

    Law is never moral

    The law is never moral. It wasn't long ago that it was illegal to be homosexual. Was the law moral then? No, so why can it be moral now? Taxation is just law, and so it can never be moral either. Why is it a moral duty to pay as much tax as possible knowing that it is going to be wasted. It is your duty to pay the minimum tax to force the government to be efficient with what it does get.

    1. Anonymous Coward
      Anonymous Coward

      Re: Law is never moral

      Morality develops over time, it used to be that homosexuality was considered an abhorrent act - something considered staggering by modern right thinking people. This opinion has changed over time and the law has changed to match. Murder, however, has always been considered morally wrong and has always been illegal. Some laws are not moral, but most are. Payment of tax is a moral requirement because we have to pay for our society to work. People who use loopholes in the law to avoid paying for the benefits that society gives them do not act in a moral manner.

      No-one says that you should pay more tax than you are required to, this is a classic straw-man. What is said is that people/companies shouldn't avoid paying tax in such a manner that the use methods which weren't intended by law.

  30. C. P. Cosgrove

    HMRC's reputation ?

    I don't see where HRMC's reputation comes into this - their job is to enforce the ( byzantine ) tax laws that Parliament ( = MPs ) create.

    And further to one comment earlier, the record shows very little corruption at operational levels in the British Civil Service. Ill equipped, under trained and under funded are different matters.

    Chris Cosgrove

  31. Erwin Hofmann
    Thumb Up

    Tax Evasion vs. Tax Avoidance ...

    ... it's the old question about Tax Evasion vs. Tax Avoidance ... isn't it ... who, in his right mind, pays more taxes as they have to ... would you ??? ... silly isn't it ... if one can avoid (legally) you can/should/have to do it ... and so do they ... and, don't forget, all the employees who pay their taxes in the country anyway ... I remember, when Ireland changed some tax relieve (regulations) for artists, U2 (the bands company) moved swiftly its business to the Netherlands, to avoid the higher tax demanded in Ireland ... villains ??? ... I don't think so ... if big international companies have some special arrangements, so what, in the end the we all will benefit ...

  32. Anomalous Cowshed

    MPs demand rates revamp

    This may not be so much about Google as about finding an excuse for a nice rates revamp... The economy isn't doing very well, and there are 500,000 civil servants with families to feed and mortgages to pay, not to mention all the other government servants and agents doing non-critical work (non-critical at least from the perspective of the average taxpayer).

  33. Tyrion
    Facepalm

    Reluctancy to act

    There's a reason politicians are reproving companies like Google in the media rather than fixing the source of the problem, which is of course the tax laws, and that's because most companies do the same thing. If the tax law exploits were fixed, many of companies that politicians have relationships with would lose money. Therefore we have this strange situation where a media PR war is being waged, yet all the while nothing is done to fix the exploits that companies are using to avoid paying taxes.

    Charities and shell companies, and dividends seem to be a popular way to avoid paying tax. What does the government do about them? Absolutely nothing, because they also benefit from the same loopholes. Only the ordinary working class suffer because they can't evade PAYE.

  34. Tom Chiverton 1

    Google has more money than HMRC. Who do you think will win the endless court rounds ?

    1. Anonymous Coward
      Anonymous Coward

      Her Majesty's Revenue & Customs Service

      Her Majesty's Courts & Tribunals Service

      Her Majesty's Prison Service

      ... are you beginning to see a pattern yet?

  35. Iain
    WTF?

    "We do not promote artificial tax structures"

    Huh?

    Aren't all tax structures artificial by definition?

    Or is there an all natural, organic, free-range tax I haven't heard about?

  36. Destroy All Monsters Silver badge
    Trollface

    Meanwhile, deep in the dark woods of bureaucracy, not far away.,,

    Knights of HMRC: Money! Money! Money! Money! Money! Money!

    Schmidt: Who are you!?

    Knight of HMRC: We are the Knights who say..... "Money"!

    Schmidt (horrified): No! Not the Knights who say "Money"!

    Knight of HMRC: The same.

    Other Knight of HMRC: Who are we?

    Knight of HMRC: We are the keepers of the sacred words: Excise, Tax, and Cus-tommms!

    Other Knight of HMRC: Cus-tommms!

    Schmidt (to Larry): Those who hear them seldom live to tell the tale!

    Knight of HMRC: The knights who say "Money" demand..... a sacrifice!

    Schmidt: Knights who say Money, we are but simple businessmen who seek the riches that lie in this here not so vibrant economy.

    Knights of HMRC: Money! Money! Money! Money! Money! Money!

    Larry: No! Noooo! Aaaugh! No!

    Knight of HMRC: We shall say "Money" to you... if you do not appease us.

    Schmidt: Well what is it you want?

    Knight of HMRC: We want.....

    (pregnant pause)

    .......................TEN BEEELION BRITISH POUND! (the paper money version only though)

    Schmidt: A *HOW MUCH*?

    Knights of HMRC: Money! Money!! Money! Money!

    Schmidt: No! No! Please, please, no more! We will find you a TEN BEEELION.

    Knight of HMRC: You must return here with a TEN BEEELION.. or else you will never pass through this bureaucracy... unmolested.

    Schmidt: O Knights of HMRC, you are just and fair, and we will return with a TEN BEEELION.

    Knight of HMRC: One that is fungible.

    Schmidt: Of course!

    Knight of HMRC: And does not cost *too many* jobs.

    Schmidt: Yes!

    Knight of HMRC: Noowwwww.... GO!

    "Da dad da da dadad...."

  37. Nifty Silver badge
    Mushroom

    cash out of reach

    Transfer pricing and licensing shenanigans meant Apple has most of it's spare cash - a lot - parked outside for the U.S. Many companies do this includes no doubt big pharma.

    here's the interesting bit: You have to park that cash somewhere where there is a predictable jurisdiction and rule of law - as you need legal protection for your cash pile. Only it may not be as predictable as you hoped, e.g. Cyprus. The bigger the cash pile concentrated in one place that's out of reach of the big power countries (that are doing the whingeing about missing tax receipts), the bigger the risk.

    How long before the first big 'our tax avoiding cash pile vanished, big developed country govt please help us to get it back now' case?

  38. Catweazle666
    Devil

    HMRC lacks 'common sense'

    The entire British administration from the Prime Minister through the (un)Civil (not)Service down to the most junior clerk, including - in fact especially - Local Government and sundry para-Governmental organisations such as Crapita and its offshoots plus various debt collection agencies and other sub-contractors lack 'common sense'.

    It would seem the possession of this otherwise valuable property is a total bar to obtaining employment in any of the above groups.

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