Jessica Fino 29 Mar 2018 11:40am

Google UK to pay £50m tax bill

Google has revealed it will pay nearly £50m in taxes this year in the UK, a 35% increase from £36.36m paid a year earlier

The multinational said in its 2017 accounts that it would have to pay £49.3m in UK corporate tax on its profit made in the year ended June 2017. The company reported profits of £202.4m.

Google’s auditors EY have signed the accounts.

A Google spokesperson said, “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. We are investing significantly in the UK, including starting work on new offices in Kings Cross for 7,000 staff.”

The company previously received fierce criticism over a deal with HMRC, where Google agreed to pay £130m in back taxes covering money owed since 2005.

Despite former chancellor George Osborne’s claims that the UK secured £130m corporation tax deal with Google, the company’s accounts showed that the government was actually only able to secure less than £100m in corporation tax from the tech giant for the 2005-2014 period.

The Reuters news agency then calculated, based on Google's filings over the period, that around £24bn in revenues in the UK would have generated a tax bill of almost £2bn.

The Alphabet-owned company has shifted $19.2bn to a shell company in Bermuda using two tax loopholes – the “Double Irish” and the “Dutch Sandwich”, according to Bloomberg.

Nearly all of Google’s international advertising revenue is booked through Google Ireland Ltd., the firm’s Irish subsidiary. From there, the money is passed onto Google’s Dutch subsidiary – Google Netherlands Holdings BV.

Finally, money is moved to Google Ireland Holdings Limited, a subsidiary based in Bermuda – effectively sheltering international profits from taxation due to the country’s lack of corporation tax.