Google “very proud” of UK tax plan

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Google’s chairman, Eric Schmidt, has said he is “very proud” of the company’s controversial UK tax plan

The online giant chief rebuffed criticism over its corporation tax payments saying “it is called capitalism. We are proudly capitalistic. I’m not confused about this.”

Earlier this year it was revealed that Google paid only £6m in tax after making revenues in the UK of £396m.

“We pay lots of taxes; we pay them in the legally prescribed ways. I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate,” Schmidt told Bloomberg.

Business secretary Vince Cable has dismissed the comments, telling the Daily Telegraph, “It may well be [capitalism] but it’s certainly not the job of governments to accommodate it.”

The recent Public Accounts Committee hearing heard how Google manages its tax affairs in the UK through an Irish subsidiary, which employs Google UK as an agent. Only the fees paid back to the UK arm are taxable and the Irish arm of pays much of its revenue to the web giant’s Bermudan firm in a legal process. 

Last week Starbucks bowed to public and political pressure by announcing unprecedented plans to voluntarily pay over £20m in corporation tax to HMRC over the next two years.

However, the tax profession reacted angrily to the proposal, claiming it “makes a mockery” of the tax system.


Raymond Doherty


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  • Comment by Pierre Cuisineau

    He's quite right. It is called capitalism. Equally, what Parliament does is called government. Government can set any rules it chooses and it ought not to be beyond them to make some rules so that Google joins the club with the rest of us taxpayers. Having MP's 'grilling' people because they pay no tax under the rules which the MP's made in the first place just seems absurd to me...or was it just that Parliament doesn't want to force non-UK based business to pay tax because they might take their business elsewhere?

  • Comment by ks

    Good for him. Its about time someone stood up for their right to organise their tax affairs within the law set up by Parliament.

  • Comment by PEO

    Have to use different search engine until; Google pays corpoaration tax in UK based on UK earnings and current rate of Corpation tax rate in UK.