back to article Google UK coughs up £130m back taxes. Is it enough?

Google is to pay £130m to settle a tax dispute with the British Government over how it account for revenues booked in the UK. More importantly for Treasury coffers Google will now "pay tax based on revenue from UK-based advertisers, which reflects the size and scope of our U.K. business,” a Google spokesman wrote in an email …

Anonymous Coward

With my 'GOOGLE-GOGGLES' on...

...it looks like 1.3 new pence....these goggles are brill!!

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it's a start

They may have settled om favourable terms this time but it helps establish the principle of paying tax closer to where the income is earned.

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Anonymous Coward

Re: it's a start

No it isn't, ot is an end to being able to get the correct amount of tax against 10 years of mega profits.

These non tax paying corps distort the would commercial world, not paying tax means they have 20% free money to buy smaller businesses to their advantgae, apply pressures in others and make more oligopolies.

And you are one of many falling falling for their shite.

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Re: it's a start

"And you are one of many falling falling for their shite."

Do you Daily Mail readers that scream about all of the "tax avoidance" really think that they could continue operating in the country for a decade without the government stamping on them?

The behaviour doesn't seem to be moral, but it is following the laws. The problem is not the likes of Google, it is deficiencies in the tax laws that Google (etc) is showing up.

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Re: it is deficiencies in the tax laws

The problem with it being a deficiency in the tax laws is that makes it the government and the MPs fault and they can't admit to this.

The international tax system is simply no longer fit for purpose.

Now if I work in India I have to pay an Indian withholding tax. That is I have to pay Indian tax on the work I do there, they will then give me a certificate that says I've paid this tax and I can then claim this back against any tax the UK authorities might want to charge me on the same piece of work. If Indian tax is higher than UK tax, I lose out.

Now this strikes me a much more sensible way to work in an international environment. If Google (and all the others, it ain't just Google) had to pay UK corporation tax on work done in the UK and were then given a certificate to hand to the Irish authorities that says they've already coughed up this much. Then the UK would get the tax due on the UK bit of business. So instead of paying the lower rate of tax between the 2 countries, they have to pay the higher one.

Of course there are still a million and 1 tricks played by accountants.

So for example Starbucks claim that Starbucks UK makes no profit on any coffee sold in the UK because for every £1 worth of coffee they sell they have to pay £1.01 to Starbucks Logo Inc of some tax haven somewhere. This sort of thing is just pure bollocks and should be outlawed. Money spent of real R&D should be recoverable or there will be no new products, but money spent on other spurious bits of IP shouldn't.

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Re: it is deficiencies in the tax laws

"So for example Starbucks claim that Starbucks UK makes no profit on any coffee sold in the UK because for every £1 worth of coffee they sell they have to pay £1.01 to Starbucks Logo Inc of some tax haven somewhere. This sort of thing is just pure bollocks"

Pure bollocks indeed, since that's just fiction. Starbucks didn't make a profit in the UK because they paid too much for their leases, end of story. They paid the market rate for their coffee (which we know because they also sold coffee to others, at the same price), as the law requires them to do - and if they hadn't, then they'd be moving profits _from_ Switzerland _to_ the UK, since their coffee purchasing and processing does actually happen in Switzerland (along with most of Europe's).

This really is all just some not very well-disguised antisemitic propaganda, and it's a crying shame that so many gullible dupes like you have fallen for it.

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Anonymous Coward

@DaveDaveDave

Maybe they should have fought against the 20million euro EU fine which found they did exactly that (along with other such scams). The only reason coffee trading is done in Switzerland, is the same reason metals and other goods are traded there - THE TAX ADVANTAGE.

So rather than your ridiculous conspiracy claims how about writing some actual facts...

"Starbucks Manufacturing, based in the Netherlands, is the brand’s coffee roastery in Europe. It sells and distributes roasted coffee and ancillaries Starbucks outlets in Europe, the Middle East and Africa. The investigators reported that Starbucks Manufacturing has paid a ‘very substantial’ royalty to a UK-based group company for ‘coffee-roasting know-how’, and was also found to pay an inflated price for its green coffee beans, bought from a Swiss-based group company.

They said that the royalty for ‘know-how’ could not be justified, and that the unrealistically high price the roaster was expected to pay to buy its green beans from another group company meant that the roaster could not actually generate sufficient profits to pay the ‘know-how’ royalty.

This is illegal under EU law and the European Commission has ordered the Netherlands to recover the unpaid tax from Starbucks, and to cease the tax benefits the group previously enjoyed."

also see here ... http://www.theguardian.com/business/2015/oct/21/starbucks-and-fiat-tax-deals-with-eu-nations-ruled-unlawful

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WTF is this "antisemitic propaganda" you keep going on about?

There was nothing about Jews or Nazis in the article at all, you must have reading between the lines down to an art form.

[To the sane people: yes I know he's a mindless troll, but I'm curious to see how he can stretch logic to such a breaking point]

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Re: it's a start

Is it the same reason that Starbucks started coughing up, despite the fact that they hadn't broken any laws as they are written, the bad reputation they got was costing them business and that lost business was worth more than they would have paid tax. When they paid they made a public fuss about it so everyone knew.

So, stop buying Apple, stop using google, stop using any of these companies that are taking the piss.

We don't hear much about Microsoft? What's with them all these years and licence fees?

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(Written by Reg staff) Gold badge

anti-semitic propaganda? Gullible dupes?

DaveDaveDave - be civil, thank-you.

On the anti-semitic propaganda accusation - I can detect no proxy here for "Jews control the Federal Reserve / world financial system" madness.

You have done your fellow commentard a disservice - to the point of trolling.

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Re: it's a start

If they used profits to buy businesses they wouldn't pay tax on it.

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Re: anti-semitic propaganda? Gullible dupes?

If I were to hazard a guess it could be that there are large sections of Mein Kampf that read like the anticorporate conspiracy bollocks you can find depressingly easily on the Internet. Just replace 'World Jewery' with 'New World Order' or 'bankers'. We all love a boogeyman on which to blame all of society's ills, especially if they're rich.

That said, Google need to pay some damn tax.

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Anonymous Coward

antisemitic propaganda

I don't blame the joose I blame the romans. What have the romans ever done for us?

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Re: it is deficiencies in the tax laws

El Reg, you need a tinfoil hat icon

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Re: it is deficiencies in the tax laws

wtf is it with 'you people' any time anyone has a beef they have to be compared to mengeles.

fuck you and fuck starbucks, they were gaming the system.

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Re: it is deficiencies in the tax laws

The other problem with it being a deficiency in the tax laws is that google has spent more than this tax payment lobbying for taxation and laws that are favourable to it. These mega corporations own the politicians.

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Re: WTF is this "antisemitic propaganda" you keep going on about?

I think he just wants to get in first with the "Godwin's" call.

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If I didn't pay my taxes for 10 years ...

... I'd be spending the next few in one of the HMPs.

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Re: If I didn't pay my taxes for 10 years ...

Google did pay its taxes, though. You've fallen for some antisemitic propaganda.

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Re: If I didn't pay my taxes for 10 years ...

I now understand!

Davedavedave is a marmotte ( see YouTube)

Marmottes live in Les Deux Alpes in France

Every Summer Jews go on a pilgrimage to Les Deux Alpes to wander on the downhill mountain bike trails and to test there faith in god that they won't get flattened by someone doing 50mph down the track.

If you don't believe me you can Google it which is why criticising Google for being tax dodging scum is anti semitic.

At least that's how Davedavedave tells it to his therapist. ..

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At least that's how Davedavedave tells it to his therapist. ..

... wow new candidate for 'shittiest job in the world'

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Re: If I didn't pay my taxes for 10 years ...

If you did it legally, as Starbucks/Google etc. do, then. no, you wouldn't.

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Anonymous Coward

The article author is part of the problem.

Perpetuating the VAT myth. "businesses now have to pay VAT in the country of the consumer buying the goods not the business."

This is incorrect. Companies DO NOT PAY VAT.

The new rules mean that VAT they COLLECT from CONSUMERS has to be returned to the country in which the consumer paid the VAT. I.E. they can't collect VAT from the UK and pay it back to Luxemburg. The question is of course did they collect 20% from the UK and pay Luxemburg 3-17% depending on product/service.

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(Written by Reg staff) Gold badge

Re: The article author is part of the problem.

What problem? this is quibbling over semantics.

Companies charge VAT on their products and services and they pay VAT for the products and services they buy. When there is a surplus - and in Amazon's case this will be vast - they pay the difference to the relevant authority.

The change of VAT rules could mean that retail customers end up paying a bit more for their geegaws. But enough to suppress demand? Amazon would be unaffected in such a scenario - or more likely would as it is so dominant in Europe that benefit at the expense of weaker competitors.

Corporate tax is the now big battleground. I don't see Amazon ever paying much here - it will just build some more data centres, or buy some more businesses, or invest in warehouse robots. All good things, of course.

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Anonymous Coward

Re: The article author is part of the problem.

Again you proagate the myth. It's not semantics as you get the line "They don't pay much corporation tax, but at least they pay VAT" which makes them appear less avaricious.

"Corporate tax is the now big battleground." It might be, but you put VAT in the mix and VAT is not a corporate tax, they do not pay it. < That's a FULL STOP.

They collect it on behalf of Govt's, you talk as if it's a tax on companies, or in the same breath as company taxes and people will think it is a company tax when it is not. It is the same when companies talk about the NI they pay when that is not a company tax either, for good or not, it's an employment tax.

Don't know where the demand supression came from.

You don't see Amazon ever paying much tax here, OK, so what happens when NO company pays tax here?

Do I assume people with such views are paid enough to have private health insurance, pay for private schools. Who builds the roads, private companies and we have tolls everywhere. Who stops your twat neihbour buliding a 3 storey extension to block your light has a kennel compond with 500 howling dogs and starts drug dealing filling your street with people who might not agree with you living there?

I guess the haves move out and leave the rest living in Detroit?

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Re: The article author is part of the problem.

They do pay their employees though, and their employees pay income tax. In fact in most cases the employers pay the income tax on their employees salaries "as they earn".

The problem for the government is that if google decided that they didn't need that humungus new place near St. Pancras then there would be no income tax.

If Amazon decided to deliver all their sales from the continent, then there would be another stack of people who need benefits, and another load of income tax that wouldn't come into the exchequer.

It's a ransom.

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Re: The article author is part of the problem.

'They do pay their employees though, and their employees pay income tax. In fact in most cases the employers pay the income tax on their employees salaries "as they earn".'

First sentence correct, second sentence incorrect. It's much the same as VAT; they're tax collectors, at their own expense, on behalf of HMG. They're also tax collectors on behalf of HMG in respect of employees' NI contributions. But they do pay employer's NI.

However it's fair to say that they are responsible for generating income tax and VAT by providing employment and selling stuff. They will also be spending money on goods and services which will also result in income and corporation taxes (they'll also be charged VAT but this will be offset against the VAT they collect).

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Re: The article author is part of the problem.

"this is quibbling over semantics."

Have a word with your accountants on this.

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Anonymous Coward

Re: The article author is part of the problem.

This is quibbling over semantics? I thought it was anti-semantics!

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Re: The article author is part of the problem.

They do pay their employees though, and their employees pay income tax. In fact in most cases the employers pay the income tax on their employees salaries "as they earn".'

No - they largely pay the minimum wage so their employees pay no tax and are almost certainly in receipt of some government subsidy like housing benefit. The number of companies that are subsidised to rip us off is rising by the hour!

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Re: The article author is part of the problem.

They pay minimum wage salaries, the employee pays no income tax and is entitled to Working Tax Credit. Thus the government is in effect subsidising the large corporation who creatively minimise their tax liabilities...

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Trollface

Re:this is quibbling over semantics.

I think it's already been established that we are all anti-semantic in here

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Re: The article author is part of the problem.

"This is incorrect. Companies DO NOT PAY VAT."

I am almost 100% this is not technically correct either. It varies with the company size and the country.

Companies:

- do not have to pay VAT on some purchase (if both side have a VAT number and can sell VAT free for the good concerned). This gets even more complicated for purchase across countries

- have to pay VAT on certain purchase, but can claim it back on their VAT balance with the tax man.

- cannot claim back VAT on all expenses (e.g. it used to be the case to not be able to claim back VAT on French motorway tickets and I think, still to date, you can only recover a part of VAT on petrol in travel expenses)

- in the UK, on small companies, you cannot claim back VAT on many expenses (I am just thinking of some expenses where we cannot claim VAT back with building free-holding company I belong )

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Re: The article author is part of the problem.

companies with charity status may also pay VAT (and not claim back) -depends on the charity and what they do.

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Re: Companies DO NOT PAY VAT.

I am not a qualified accountant but I think what is being said here is that VAT does not appear on a company's Accounts, other than in the Balance Sheet as an amount that has been collected by the company which is to be passed on to HMRC. VAT Registered Companies are nothing more than collecting agents for HMRC.

There are companies out there who produce zero-rated goods who receive regular payment of their Input Tax from HMRC because their Output Tax is zero. (Food companies for example).

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so why don't we just annex the Caymans and Bahamas and make them subject to UK law? The Bahamas could presumably have their independence reversed by an Order in Council as the queen is head of state, while the Caymans are still a British overseas territory and Parliament could impose laws - or again an order in council could impose British law.

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Anonymous Coward

Because it suits the suits in power not to do so.

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Anonymous Coward

and because the people who live there may object?

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And the corporations would just go somewhere else.

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This post has been deleted by its author

The Cayman Islands was created as a tax haven by the UK govt, which still has ultimate jurisdiction.

This recent docu (still on iPlayer) put this point very nicely during the last 10 mins of the prog:

http://www.bbc.co.uk/iplayer/episode/b06wrt2d/britains-trillion-pound-island-inside-cayman

Conspiracy theorists might also like to imagine that keeping the Cayman population well fed and infrastructured is part of the US-UK axis defense policy.

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"To put this in context, the company paid paid £20.4m in taxes in 2013 on sales of £3.8bn"

And what context is this?

Remember, corporation tax is paid on *PROFIT*, not *SALES*.

Why is it every time tax is discussed, two numbers that are completely irrelevant to each other are entered as some kind of evidence?

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Anonymous Coward

@Graham Triggs

And if they declared some profit in the countries where they extract the money, this wouldn't be an issue.

As I used your IP i.e "@Graham Triggs" in this post, which tax evading shell company will internally charge me 99.999% of the revenue generated by this commercial posting?

These are no loop holes, they are there by design. Tax havens were invented by the UK, but I'm not sure whether 'they' think they might be out of control with the exploitation by mega corps and the growing voices saying something needs to be done.

Still the new spying bills will let Govt's know who to silence if the shit starts hitting the fan and a big way.

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Google is an immensely profitable company

There is no confusion here - Google has chunky margins on huge revenues. Transfer pricing would be the only way that the company is not making big profits in the UK.

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This post has been deleted by a moderator

Anonymous Coward

"At least you're proving my point with the use of language straight out of The International Jew"

What planet are you on, WTF has this got to do with religion?

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Nothing to do with religion, unless you consider being a neo-Nazi some form of religion - or if you're the kind of antisemite who blames 'the Jews' for antisemitism. Everything to do with a new spin on old-fashioned antisemitic propaganda, though, as you can tell, in part, from the use of the same language with only one word missing.

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Anonymous Coward

"Nothing to do with religion"

OK then we agree, I'll ignore the incoherent rant that followed the understandable bit.

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