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Google paid £6M on tax on a turnover of £395M in the UK - given that they don't have that much operations in the UK that suggests they they have been avoiding tax on their UK operations by manipulating where they choose to make profits so that the profits occur offshore rather than in the UK.

Nothing particularly unusual or illegal about this.

So they have been "avoiding" tax - but there is nothing illegal about that, or from my perspective, particularly immoral about it.




> £6M on tax

£6M in corporate income tax, which is only one of many taxes (and usually the smallest component) that a corporation pays.

For eg. they would have collected a 20% VAT (consumption tax in the rest of the world) - which is another £80M, a 13.8% national insurance contribution, which would work out to be approx another £40M, and then on top of that a payroll tax.

I am not familiar with the other payroll tax rates in the UK but it is similar in most other countries - the three or four different tiers. In the USA payroll taxes are 5-6x larger than corporate income taxes. Add them up for Google in the UK and you get to £130-140M contributed from a gross of £395M - a very different story to the headline figures that are being argued.

edit: forget the figures, I don't know the UK tax system enough to even guesstimate, but the tl;dr is that corporate income tax is the smallest of a number of tax components that a corporation pays and arguing by taking out corporate income tax figures alone is misleading. This is the point that Google attempted to make.


For eg. they would have collected a 20% VAT (consumption tax in the rest of the world) - which is another £80M, a 13.8% national insurance contribution, which would work out to be approx another £40M, and then on top of that a payroll tax.

Consumer VAT and consumer income tax are not tax paid by a company, and it's disingenuous to suggest that 'a corporation pays'. They merely collect them from the customer/employee for the government, it's not as if the corporation contributes anything on top of that. They do contribute to NI as you mention, and local business rates on property in the UK at least, but the vast majority of revenues can escape taxation, and I don't think customer VAT, and employee IT can be considered paid by the employer, they are paid by the customer or employee.

There are of course many benefits to having a company setting up in your country (the aforementioned VAT and income tax receipts from the employees, rates, and jobs generated), but companies offshoring profits and shopping for tax jurisdictions by setting up fake subsidiaries whose sole purpose is to evade tax is a huge problem for all western countries, and not one they can address with current tax law. That's the reason that many receipts in Europe nowadays bear the legend 'S.a.r.l, Luxembourg'. All major corporations from Apple, to Amazon, to Google do this to some extent, and it results in tiny countries like Luxemburg collecting huge amounts of tax (in proportion to their size, and the true number of business who truly transact business there (as opposed to claiming they do)), simply because they're willing to give corporations the lowest international rate,and let them set up shell companies to funnel online revenue through the tax haven.


VAT is paid by the consumer, not by Google. The best you can argue is that maybe if people had not spent that money with Google they might have spent it on goods that do not have VAT levied on them. That is a pretty weak way to claim they are responsible for £80 million in additional tax revenue.


They'd only be paying £40M in employers NI if all of their turnover went on salaries - which seems unlikely as they are clearly profitable.

I'd also argue that it is employees who pay income tax - not the employer (even with PAYE meaning that employees don't see that money).




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