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back to article Google sinks millions into plush new £1bn London HQ

Google's new digs in Blighty's capital - as widely expected - are being built in Kings Cross, London, the company has confirmed. The world's biggest ad broker is reportedly sinking £650m into its new home. The company's UK headquarters are currently in Victoria, but the lease for that building runs out in 2016. It's been …

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The going rate

> worth a cool £1bn

and they'll still only pay a couple of quid in business rates on the building

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Re: The going rate

Can you tell us more about why they'd be paying less in business rates? Unlike Corp Tax or VAT, business rates can't be avoided since the tax is payable on the physical building. Registering the company in the Cayman Islands or Switzerland makes no difference: it's the location of the building that matters. If they don't pay the tax then the taxman can take the building.

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Re: The going rate

and they'll still only pay a couple of quid in business rates on the building

Yawn

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N2
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Re: The going rate

> and they'll still only pay a couple of quid in business rates on the building

Probably 'cos its been furnished from a charity shop.

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Re: The going rate

>Can you tell us more about why they'd be paying less in business rates?

Because they will get a huge community catalyst innovation injection to bring the wonder of online icloudy goodness to the poor depressed capital

You can bet they are getting a bigger back hander than any Japanese car plant in a marginal constituency

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Headmaster

I bet I can out-pedant you

From Mr Berners-Lee's Web FAQ:

Q: How in fact do you spell World Wide Web?

A: It should be spelled as three separate words, so that its acronym is three separate "W"s. There are no hyphens. Yes, I know that it has in some places been spelled with a hyphen but the official way is without. Yes, I know that "worldwide" is a word in the dictionary, but World Wide Web is three words.

I use "Web" with a capital W to indicate that it is an abbreviation for "World Wide Web".

The bloke was kind enough to give his idea to the world for free. The least we can do is respect his spelling preference.

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Devil

Re: I bet I can out-pedant him

www is an abbreviation, not an acronym. An abbreviation with three times as many syllables as the unabbreviation!

Oh, wait... It seems I'm posting this on the wuhwuhwuh. And I made up "unabbreviation."

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Thumb Down

loads of money

Small change coming out of their tax-dodging exploits.

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Holmes

But...

With a bit of luck the money ended up being cycled around the UK economy, which, arguably, is more efficient than paying tax.

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Anonymous Coward

Re: But...

Nope, that's now how it works. It ends up in Ireland or Cayman Islands or somewhere else.

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Let me guess, the money is being provided by google [insert tax haven] at an apr that would make a loan shark blush and will be a nifty way to avoid paying tax. again.

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Angel

Look at the bright side, will ya?

These £650m are coming from outside the country and are being used to buy/build stuff inside the country. You'd prefer they do it in Ireland?

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Re: Look at the bright side, will ya?

That is a good point. Although how much of that $650m will end up in our economy vs how much will end up buying foreign materials and paying for imported labour? I doubt the impact will be significant but I would truly love to be proven wrong.

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Not quite as simple as that.

You have two offshore companies in different tax havens. Lets call them Google Finance Co and Google Property Co. You have the trading company in somewhere like Ireland or Luxembourg, and a service company in the UK.

Google Finance Co lends the money to Google Property Co. Google Property Co rents the building to Google Service Co. Google Trading Co outsources work to Google Service Co.

The tax rate on rental income for an offshore company (20%) is lower than the tax rate for trading profits for a UK company (24%). Rent is an allowable expense for the service company. Loan interest is an allowable expense for the property company. Interest received by one offshore company from another offshore company is outside the reach of the UK Exchequer. The service company has to be competitive with outsourcing providers in countries like India, so it won't make a lot of profit, if any.

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design choice

are they going with the Weimar Republic brothel/Big Brother (Ch5 not 1984) crossover look for their new office too?

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More money than sense

Paying £650M to build a workspace for 1300 employees is £500,000 per seat. Any business that can afford to spend that has way too much money and should be charging less (or paying more tax).

Hands up any typical UK SME service company that could consider wasting that sort of money?

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Re: More money than sense

At the end of it they will own a building worth £1B, plus no rent to pay on their 1300 seats.

That's not a waste. It's not like the building will depreciate.

But I'm not sure how Google an charge must less to *most* of their users....who get their services for free.

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Re: More money than sense

"1300 employees is £500,000 per seat."

My seat cost £25 from a charity shop.

Can I get a job as a consultant to Google?

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Anonymous Coward

Re: More money than sense

Got to spend lots on the "special people", the creative people at Google who spend all say surfing for upcoming products from other people so they can find some ideas to steal.

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Anonymous Coward

Re: More money than sense

I thought thegoogle products users were the product or raw materials to be fed to the advertisers rather than their customers

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Unhappy

Why £1bn?

Someone care to explain how their property value will rise so fast that by investing £650M, they'll buy a £1bn place? No-one I know pulled that off.

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Alert

Re: Why £1bn?

Because it's in London - which has this awesome green belt or "appreciation belt" as I like to call it that means buildings can never lose value. It's literally impossible. It's a self-fuelling fire too because as soon as people realise it attracts even more buyers because it's a safe bet, guaranteed profits.

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Re: Why £1bn?

Well, the building cost of your average house is less than the cost of it when completed, otherwise builders would all go bust. Same with office blocks. They spend £630M, and when completed it's worth £1B. Google make the profit, not the builders in this case.

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Meh

2Re: Why £1bn?

Agree with James's "profit for builders", but streaky's one about the "appreciation belt" sounds like a big bubble to me. Self-fuelling, exponential value growth for something that in the end has only finite practical value... you literally see the air in that.

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Paris Hilton

Re: 2Why £1bn?

"Self-fuelling, exponential value growth for something that in the end has only finite practical value... you literally see the air in that"

It isn't finite though - London's population will always grow no matter what the financial situation (indeed in recessions it seems to grow faster due to people coming to find work) but there's a legal block making it impossible to grow the city horizontally so there'll always be increasing demand for space and thus higher prices. It's the ultimate property scam.

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Re: Why £1bn?

rental saved and earned aside, they don't get that £650 million back until they sell (or mortgage) the place.

Up til then they've spent a lot of money which would have gone a lot further if spent elsewhere.

Its not like they need to be in the centre of London, is it? I thought the point of all this techno-wizardry was that business was no longer tied to being next door to its customers.

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Anonymous Coward

Re: Why £1bn?

"Its not like they need to be in the centre of London, is it? I thought the point of all this techno-wizardry was that business was no longer tied to being next door to its customers"

If one of your marks is the uk government and probably it's data, it makes perfect sense.

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Not Neasden

It would have been more accurate to say digital computing began in Dollis Hill. Just sayin' UK might give supporters of the Neasden Football Club ideas above their noses ...

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Re: Not Neasden

there and Milton Keynes.

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TBH I am past the point of caring how much businesses try to avoid paying tax here. All the government does with it is bloody continually waste it anyway.

On the building side, at least its IN the UK.

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Anonymous Coward

I'd sooner they wasted Google's money rather than mine. They'll only waste it on stupid childish toys when I would spend it on a house extension and other important things.

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Happy

"a building that will "range in height" from 7 to 11 storeys tall."

Cool. Will a big cover retract from the top floors when it reaches its full erect height?

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Re: "a building that will "range in height" from 7 to 11 storeys tall."

Could be worse, it may be a fixed overall height but moves in and out of a 4-floor deep cellar.....you could have it rise through the day to follow the sun or to emulate the stock value.

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Re: "a building that will "range in height" from 7 to 11 storeys tall."

Typical bloody google - can get away with that kind of comment and still get planning permission. My house was about 3cm too tall so had to redesign the whole bloody thing...

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Re: "a building that will "range in height" from 7 to 11 storeys tall."

>Will a big cover retract from the top floors when it reaches its full erect height?

Depends what sites they are Googling !

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Re: "a building that will "range in height" from 7 to 11 storeys tall."

Move along now, nothing to see here. The building will most likely have some sectors that are 11 storeys tall, and others that are only 7, e.g. have a "staggered" roof line dropping one storey for every x metres from one end to the other.

I used to work in a building in Victoria that was the same, one end about twice the height of the other. Rumour has it that it was originally planned to be all the taller height, but the land near the river is a bit marshy in places. They worked out that if the soutrhern end was built as high as the northern, there was a fair chance it would sink!

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" ...an office in France with its entrance in Switzerland."

I have an idea for a whacky science-fiction story; suitable for children's television. The stationary cupboard is in Basildon, but that can change at random.

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Headmaster

Re: " ...an office in France with its entrance in Switzerland."

The stationary cupboard will be forever in Basildon. You could let the stationery cupboard whizz around at random though.

Sorry, couldn't resist, hence icon.

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Devil

If the UK Gov keeps turning the tax screws you can expect a curtailment of such investments in the future.

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Boffin

The government isn't turning tax screws it's just pretending to for the cameras (no court cases or bills sent yet) and also, in a situation where classical economics is useful - you might be right.

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Anonymous Coward

Re: Tax Screws

If the UK Gov keeps turning the tax screws you can expect a curtailment of such investments in the future.

Well, not only is it unlikely that HMG will actually turn any tax screws but, even if they do, people will still be splurging money on things like this.

Not that any of this is really an investment in the UK or anything either.

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Happy

CERN is neither France nor Switzerland

Since the CERN is a multi nation budgeted project, credit should go to ALL of the nations regardless of where TBL had his arse seated at the time.

The CERN pays TBL and our taxes help pay the CERN, therefore we are all reponsable for the creation of the Web.

There I feel better now in the knowledge that I actually helped get the whole thing up and running.

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h3
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Good if they want hookers. (Dunno if Kings Cross is still a red light district was when I last lived in London at night.).

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Anonymous Coward

I remember the same, it was damned annoying standing around Kings X station, women continually asking you for "business".

I think it is on the up now though.

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re: women continually asking you for "business".

IR35 has really made the contracting business tough

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Paris Hilton

It just looks like a swingers club.

Where do I apply?

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Anonymous Coward

Their HQ says "childish morons", they need to grow up.

It's no wonder they take pride in being petty to rivals.

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Anonymous Coward

That photograph!

It looks like something El Reg would knock up for a Lego re-enactment of some story or other. El Reg should slap Google with an injunction. El Reg has first dibs on the Lego world look.

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are the prices quote ot exaggerated somewhat? 1 billion quid value for an office building at kings-x? no way. that many many times more value than the most prestigeous sites in london (knightsbridge, chelsea barracks, battersea power station.)

kings-x is a total shithole, yes even now after lots of development.

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Slx

They've a pretty huge presence in Dublin

Just to point out, Google in Dublin is not a 'brass plate' operation by any means.

There's a huge presence in Ireland. They just spend €100m in cash on a new office 15 story office complex ( 210,000 sq ft) and employs over 2,500 people at their EU HQ in Dublin's docklands area and sank a further €75 million into huge eco-friendly, air-cooled data centre in West Dublin.

So it's a bit unfair to say they don't actually do stuff in Ireland, they most certainly do.

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