LONDON: Google paid £36.4 million in tax on revenues of around £1 billion last year, according to its annual reports. The company returned a pre-tax profit of £148 million for the year ending 30 June 2016, suggesting it paid a corporation tax rate of around 24 per cent. However, the internet giant’s complex accounting structure has led critics to suggest it actually generates significantly more profit in the UK than it claims. Last year, the company agreed a deal with Her Majesty’s Revenue and Customs (HMRC) that saw it register more of its sales in the UK.
Google says its UK offices, employing just under 3,000 people, are not big enough to count as a “permanent establishment” and that it therefore should pay the majority of its taxes elsewhere. “As an international business, we pay the majority of our taxes in our home country, as well as all the taxes due in the UK”, a spokesperson said. “We have recently announced significant new investment in the UK, including new offices in Kings Cross for 7,000 staff.” In January 2015, Google finalised a deal with HMRC that saw it pay £130m in unpaid tax dating back ten years. George Osborne, the then Chancellor, hailed the agreement as a “major success” but was widely criticised for a deal that opponents said let Google get away with avoiding millions of pounds in tax.
