back to article Google may face grilling by MPs over 'immoral' tax avoidance

Google could be hauled in front of MPs after the 2011 results for its UK subsidiary showed it paid £6m in corporation tax. John Mann, an MP and member of the Treasury Select Committee, suggested the advertising giant should explain itself for its "entirely improper and immoral" behaviour. "This is a company avoiding its …

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  1. JimC Silver badge

    I think it is about time

    This sort of tax location shopping was cracked down on. Morally I think tax should be paid in the country the revenue is earned in. And if that makes international trade difficult without having local agents - well I'm not sure that's really a problem...

    1. That Steve Guy

      Re: I think it is about time

      For an example of what happens to an economy when there is widespread tax avoidance, look no further than Grecce.

      None of us like paying tax but like it or not it goes a long way to making an economy work, and mass avoidance can mean disaster.

      1. Anonymous Coward
        Anonymous Coward

        Re: I think it is about time

        > For an example of what happens to an economy when there is widespread tax avoidance, look no further than Grecce.

        Get your facts straight. In Greece it is widespread tax evasion.

    2. Tim Worstal

      Re: I think it is about time

      Be difficult to do that. EU law is deliberately set up so that a company only needs to have one EU outpost. From which it can sell to all 27 EU countries.

      This is actually the aim of the Single Market.

      1. Yet Another Anonymous coward Silver badge

        Re: I think it is about time

        >This is actually the aim of the Single Market.

        So have a single corporate tax rate across the Eu !

        The single market was supposed to stop countries keeping out competitors from other countries by unfair tax and duty - shouldn't be too difficult to prevent the opposite.

        1. The Axe
          Mushroom

          Re: I think it is about time

          A single market does not mean a single price. If that was the case you would have a single price for milk or a single price for DVDs.

          A market is a way of having multiple prices and the people buying the product or service decide which price they like. The rest of the market sees which is the popular price and heads towards it.

          Generally it means it heads towards the lowest price (or tax). But it's not always a race to the bottom as buyers will also take into account quality or many many other factors. So many other factors that in many markets it is impossible to plan ahead of time which factors to concentrate on.

          The EU single market allows companies to battle on the same footings, but not to be controlled in what prices they can use. Nor does it force countries to have the same tax rates. The whole problem about why the Euro is failing is because it was a single currency imposed on many different types of economies and it just can't cope. Trying to impose a single tax would head the same way as the Euro - absolute disaster.

    3. Shagbag

      Re: I think it is about time

      I agree. And thank goodness for IR35. Avoiding PAYE on personal earnings under the sham of a 'contract' has finally been nipped in the bud. Only legitimate contractors can now get those tax breaks.

      Or maybe tax avoidance isn't such a bad thing as long as it doesn't affect my taxes?

      1. NogginTheNog
        Thumb Down

        Re: I think it is about time

        Next time you're on sick leave, or holiday (with full pay), or a bank holiday (with full pay), or that subsidised company gym, or those paid training courses with the nice hotel to stay in, or the company Xmas party... think about how fair IR35 is then eh?

        1. Shagbag

          Re: I think it is about time

          So the tax payer, not the employer, should pay for a contractor's sick leave, holiday pay and gym membership? I don't think that'll fly in the Commons (maybe the Lords, but not the Commons).

        2. Anonymous Coward
          Anonymous Coward

          Re: I think it is about time

          ...Or told to leave at the end of the week 'cos the project's been cancelled, no comeback or arguing.

      2. Corinne
        FAIL

        @Shagbag

        Would you like to define what you term "legitimate contractors" please?

        If by that you mean contractors brought in to work on a one-off project or programme for a limited length of time to fill in a short term gap in skills, with no employment rights at all, who can be terminated with no cause & no recompense, are expected to work a "professional" week which means no pay for overtime & no time off in lieu, and can't claim unemployment benefit or statutory sick pay - then you are still talking about people caught in the IR35 trap.

        If however you mean it to cover people working for years for the same employer but technically classed as a contractor, most likely because the employer is too tight to pay a permanent person the going rate for the job or because perms come under "current" budgets and contractors under "capital" budgets, you MAY have a point.

        1. Shagbag

          Re: @Shagbag

          I didn't realise I had to spell it out for some people, but I guess I have to:

          It's hypocritical to moan about other's tax avoidance when all they are doing is legitimately planning their tax affairs. The 'morality' of tax avoidance is not limited to large corporations.

      3. Steve Browne

        Re: I think it is about time

        IR35 is a piece of spiteful legislation brought in by a chancellor who was unhappy with ordinary people earning a reasonable amount of cash.

        The shame really is that the same rule is not applied to senior civil service (or BBC) staff where it really is disguised employment.

    4. LarsG
      Meh

      A way to put the blame on someone else

      The Government attempts to distract the public by blaming google for doing something that is perfectly legal.

      Is this a bury the bad news day?

      1. Anonymous Coward
        Anonymous Coward

        Re: A way to put the blame on someone else

        And look how easy it is to turn the mob on. They do nothing illegal or they would be punished for it yet the mob bays for revenge courtesy of Govenrment propaganda.

      2. Shagbag

        Re: A way to put the blame on someone else

        Absolutely. Those with little appreciation of the taxation system forget that it is the Government that makes the tax laws. If they don't like what Google, et. al. is doing then they should change the law. The fact of the matter is that successive governments (Conservative and Labor) have failed to pass adequate legislation. If they don't like what Google, Lewis Hamilton, Jimmy Carr, et. al. are doing then they should legislate against it. Only they can do it. No one else can make laws. To try and 'shame' corporations into paying more tax that they legally have to is, put simply, an admission that the Government is powerless (or gutless) to do anything about it.

    5. Paul Hatch

      Re: I think it is about time

      The loopholes you speak of relates to VAT, not corporation tax.

      There are 2 forms of sales relating to Google, The first is sale of google services (advertising is the only one based in UK), the other is shopping and as a payment processor. In these cases Google acts merely as an agent of the seller and would charge the seller VAT on commision (not the sale price).

      The £6m coporation tax, the UK treasury should count themselves lucky they got that. Large sums of revenue would be channeled out of the country legally in charges made by the parent on its UK subsiduary to cover the cost of services UK users are using. Without these services, there is no UK revenue generated. It is entirely up to the parent company how much they charge their subsiduaries and how much they leave as local profit.

    6. logiboy123

      Re: I think it is about time

      I wish google would open a branch for accounting services, I would use them in a heartbeat. They could probably do it faster and cheaper then my current accountant and save me more money.

      Welcome to the age of globalization. You can bury your head in the sand, plug your ears and shout nah nah nah, but it won't help you. Just like the music industry business model is broken, so it most countries tax systems.

      If I can operate from country A and pay less tax there, whilst doing business in countries B, C and D then why wouldn't I? It would actually be remiss of me in my duties to the share holders not to.

  2. Rampant Spaniel

    Not exactly shocking news. Not right, but hardly earth shattering. It raised the question as to why MP's are so ready to pull google execs in for a shellacking when it should really be the halfwits who wrote (or at least passed / oversaw) the laws governing taxation. The same muppets who routinely go cap in hand to these companies for campaign funds. Perhaps if they weren't bought and sold like tat on fleabay they might not feel so inclined to pass legislation with so many holes in it. Unlikely, they will continue to be bough, and when caught out they will pretend to be outraged.

  3. Destroy All Monsters Silver badge
    Big Brother

    Taxfeeders in revolt!

    > John Mann, an MP and member of the Treasury Select Committee, suggested the advertising giant explains itself for its "entirely improper and immoral" behaviour.

    I wonder in what bizarre world tax burden reduction is "entirely improper and immoral". Must be the same world in which it is considered proper and just to destroy economies wholesale by money printing, bailouts and crony-capitalist deals, as well as by entirely unecessary "warfare industrial policy" in which sandpeople are routinely grilled to a crisp in order to justify shifting a few billion of taxpayer money. Seized in a fully moral way, of course.

    1. DragonLord

      Re: Taxfeeders in revolt!

      I think that the theory is that if everyone paid their taxes in full and on time without trying to dodge any of them, the government would then be able to reduce taxes for everyone. Realistically I think that what would actually happen is that government contracts would get more expensive due to companies thinking they can milk it more.

    2. Shagbag

      Re: Taxfeeders in revolt!

      Agreed. The hypocrisy of a UK Politician saying others are 'immoral' while those same Politicians have just been caught in snout-filled feeding frenzy over their expense claims.

  4. Mark C Casey

    All big companies do this

    All big companies and rich people do this, they'll move heaven and Earth to avoid paying taxes.

    Because they're greedy. That simple.

    And the sad thing is, they get away with it and will continue getting away with it. As much as I'm sure these MP's will bluster in front of the cameras, at the end of the day the law makers won't do any serious legislating to stop them from the "legal" tax evading.

    1. Tom 35 Silver badge

      Re: All big companies do this

      I'm sure Google is being picked on because they have not contributed to the MP retirement fund to the same extent as all the other corporations that use the same loopholes (created by the MPs) to avoid paying tax.

    2. Anonymous Coward
      Anonymous Coward

      Re: All big companies do this

      And that is why we end up with this crushing deficit in the public finances.

      We all know what good that has done to the economy...

      Bottom Line: if you do business here, you should pay your tax like everyone else.

      If there are loopholes like this then they need to be closed and the system simplified down to limit avoidance.

      1. Arrrggghh-otron

        Re: All big companies and tax collectors do this

        Like Vodafone and their multi billion pound tax avoidance thing where HM Customs settled for a comparatively paltry sum as they thought it was a good deal for us tax payers?

    3. Pete 2 Silver badge

      It's your money

      > All big companies and rich people do this, they'll move heaven and Earth to avoid paying taxes.

      > Because they're greedy. That simple.

      Companies are not "greedy". They are inanimate entities with neither feelings or morals. The individuals who make the decisions regarding where to locate a company and how to arrange its tax affairs do so to maximise shareholder earnings.

      So who are these shareholders, who benefit so greatly from tax avoidance? The quick and accurate answer, if you want to see one, is to look in the mirror. Yes! you and me. We contribute towards pension savings (itself a form of tax avoidance) that are paid to pension funds which invest OUR MONEY in .... you guessed it .... shares in large companies. The fund managers decide which companies to invest in by looking at company profits and earnings per share. So if you want all these large companies to "pay their fair share" of taxes, be prepared to lose a sizable chunk of your future pension payouts.

      1. Yet Another Commentard

        Re: It's your money (Pete 2)

        I agree with the sentiment, but a pension is more of a tax stalling than tax avoidance. When you come to cash it in, you'll have it down as income and hand a proportion of it over to whoever is at No 11 Downing Street.

        I think there is an issue that whilst as a pension contributor I do vicariously own bits of companies, I cannot ring up my pension fund manager and demand he sell GOOG because they don't pay enough tax. He's too busy making sure my pension shrinks in real terms every year to do that.

        1. Anonymous Coward
          Anonymous Coward

          Re: It's your money (Pete 2)

          > I cannot ring up my pension fund manager and demand he sell GOOG because they don't pay enough tax. He's too busy making sure my pension shrinks in real terms every year to do that.

          I can't understand why somebody whose performance is measured on how well their investments perform would deliberately sabotage your pension, but if you are that paranoid then do your own. It is called a Self-Invested Personal Pension (SIPP).

          1. Yet Another Commentard

            Re: It's your money (Pete 2)

            @AC

            Fees. That is all. Performance is not matched to reward, funds are removed via a bid-offer spread, and a proportion taken from every contribution. Even with your SIPP you will be hit by some Financial Services fees, sorry, it's as much of life as death and taxes.

            It's not just the investment fees either. When your SIPP (or my pension) ends, have you seen the annuity rates you will get? I will not get back what I paid in, unless I live to be around 173.

            1. Anonymous Coward
              Anonymous Coward

              Re: It's your money (Pete 2)

              Re: Yet Another

              The bid-offer spread goes to the market makers, not the fund managers so they make no money from that.

              As for fees, they are usually based on the value of the pension. If your pension is worth more then you get charged more. This means there is no incentive for the fund manager to deliberately under perform with your pension and every reason to over perform.

              The annuity rates are based upon the BoE lending rate which is currently 0.5%. It is kept this low because the government want you to borrow money and spend it so as to stimulate the economy. They do not want you saving it.

      2. Mr. Great Sage

        Re: It's your money

        I couldn't agree with you more Pete.

      3. Tom 7 Silver badge

        Re: It's your money

        " lose a sizable chunk of your future pension payouts"

        Look closely - I think tax is quite small compare with fund management charges these days.

        I only put money into the stock market via pension contributions because I am effectively forced to fund the stock market by the tax breaks companies get for forcing me into contributing. I say forcing - I don't have to but they wont give ME the money if I don't join the scheme.

        And as for future payouts - dream on - the system is fucked. £350 Billion of taxpayers money cant keep it afloat and 0% growth over the next 10 years (if we're really lucky) is not going to pay the fund managers charges: which WILL be paid. You can rest assured of that.

        1. Anonymous Coward
          Anonymous Coward

          Re: It's your money

          > the tax breaks companies get for forcing me into contributing.

          The company doesn't get tax breaks for this. If the company puts £x into your pension scheme then the revenue will not tax it. If the company puts £x into your pocket then you have to pay NI and PAYE and the company has to also pay NI.

          > £350 Billion of taxpayers money cant keep it afloat and 0% growth over the next 10 years

          You sound like you are in a private company. Should your private pension fund have a shortfall the government will bail it out with exactly £0 of tax payers money. On the other hand, if you worked for the government then any shortfall will be funded by other tax payers. There is no upper limit as to how much they will spend to bail it out.

          As for my pension, it has an average growth over the last few years of about 4-5% per year and is now more than it was before the markets crashed in 2009. The management fees are less less than 0.05% and the tax is about 0.6% or ten times more than the fees. The tax paid is the cut the government takes from dividend earnings

    4. Anonymous Coward
      Anonymous Coward

      Re: All big companies do this

      Do you have an ISA or PEP? Premium Bonds? Fixed interest savings certificates? Index linked saving certificates? How about a private pension?

      If you have any of the above then you are taking part in a tax avoidance scheme.

      Personally, I will avoid every penny of tax I can.

      When I want to donate my money to a worthy cause I give it to a local charity. I don't consider the inland revenue to be a worthy cause and every penny I give them that I don't legally have to is no different than a donation.

    5. Nigel 11

      Re: All big companies HAVE to do this

      A company is obliged to do this. Its directors are required to seek to maximise the return for its shareholders. If they fail to take advantage of obviously legal opportunities to save tax, they could be sued by their shareholders!

      As someone said above, operating throughout the EU out of Eire (lowest corporation tax) is pretty much a definition of what the EU is for!

      The government should start by changing company law so that a company is no longer obliged to minimise tax paid (and work through diplomatic channels to try to get that change made in all developed economies). Then, maybe Google would do the right thing rather than the legal thing.

  5. Paul Shirley

    Much easier for attention grabbing MPs to distract the public with show trials than pressure their parties to stop giving business (primarily finance) these tax dodges to stop them fleeing abroad.

    These idiots collaborated in creating an 'immoral' tax system, they have no right to complain when companies actually use it. It's OK when these idiots are protecting our banking and finance industries by letting them avoid tax, it's much more immoral if anyone else does it.

    These MPs need to quit attention grabbing show trials and get of their lazy arses and force real change. That or keep taking the bribes and just STFU.

  6. Citizen Kaned

    of course they wont do anything...

    and close the loopholes they and their donators all use? dont be silly. its much easier to go after the unemployed and disabled, even though they cost us a fraction of what is being evaded/avoided.

  7. Crisp Silver badge
    FAIL

    The top-end UK corporation tax rate is 24 per cent

    And maybe if Her Majesty's Revenue & Customs would enforce it, the rest of us plebs wouldn't have to endure such high taxes.

    1. Anonymous Coward
      Anonymous Coward

      Re: The top-end UK corporation tax rate is 24 per cent

      Is corporation tax really on turnover?

      1. The Axe

        Is corporation tax really on turnover?

        No, it's a tax on profits *after* all expenses and costs have been taken care of.

  8. Anonymous Coward
    Anonymous Coward

    Nearly ALL Tech Corps...

    ...use Ireland as their EU headquarters for this reason.

    At least they pay some tax. Unlike Vodafone et al who use totally artificial shell companies in Luxembourg to completely avoid paying tax they owe.

  9. The BigYin

    Jolly good

    Can we add some more to the list?

    Every major supermarket.

    Every major bank.

    Every major accountancy firm

    Every major...you get the idea.

    Well hear some noise, see a few headlines but sod all will change. Just the Working and Lower-middle classes getting it in the neck as always.

    1. John H Woods Silver badge

      Re: Jolly good

      More importantly - every major media outlet

    2. magrathea

      Re: Jolly good

      In a way, this serves the general public right for ignorantly acquiescing to a tax system which taxes earnings (the results of effort) rather than passively received benefits. The tax system is deliberately designed to tax producers rather than net economic beneficiaries and the only producers who are powerless (immobile) enough to be taxed significantly in this way, are the poor. Meanwhile, trillions in economic benefit (value) flow from the community and the taxpayer into the coffers of the rich and yet this flow remains virtually untaxed ironically because it is not *earned* by anything the rich are doing. The tax system is upside down and this is just one of the many consequences

  10. Anonymous Coward
    Anonymous Coward

    There's Google Again!

    "Google could be hauled in front of MPs after the 2011 results for its UK subsidiary showed it paid just £6m in tax on a turnover of £395m. It effectively paid a 1.5 per cent duty when in fact the top-end UK corporation tax rate is 24 per cent."

    There's Google again, helping the UK improve its economy! You need to thank your lucky stars that Google didn't make elimination of corporate taxes a central plank of the Hargreaves report along with the expropriation of all copyright holders in favor of Google (and a gaggle of other tech companies). So that the UK would, as you chumps so colourfully put it, go "titsup" even sooner.

    But that £90m that Google put into its own pockets instead of the government coffers wouldn't save you anyway, as the official establishment of Soviet Britain is still right on schedule!

    1. Anonymous Coward
      Anonymous Coward

      Re: There's Google Again!

      What was the profit on £395m? I doubt it was 100% profit, maybe 10%...

      Also How much VAT was paid? think about it, on a £395Million turnover (i.e. income from customers) they collected around £79Million in VAT, you REALLY want to complain about that kind of tax income!

      Personally I think VAT is a much better way to collect tax than corporation tax..

  11. This post has been deleted by its author

  12. Anonymous Coward
    Anonymous Coward

    Who's fault

    It's HMRCs. They have poor legislation and are always going after the little companies (who don't wine and dine the senior civil servants and who can't offer them a lucrative job when they leave the civil service).

    Legislation is the key. Also, stopping senior Civil Servants from letting the companies off (http://www.guardian.co.uk/uk/feedarticle/10310206) would be a good start.

    HMRC - overpaid civil servants who don't want a stressful life and go after the soft targets.

  13. dharmaseal
    Flame

    He Said, She Said

    "The firm said in an emailed statement that it makes a "substantial contribution to the UK economy through local, payroll and corporate taxes".

    "We also employ over a thousand people, help hundreds of thousands of businesses to grow online and invest millions supporting new tech businesses in East London...."

    Emailed? Don't they use letter-head any longer? Substantial contribution to the economy at 1.5%?

    And with the mention of employment, the extortion threat. They are indeed immoral. No social responsibility. Just modern day robber barons.

    1. Anonymous Coward
      Anonymous Coward

      Re: He Said, She Said

      What to use instead ?

      Bing ? - do Microsoft pay their fair share of tax ?

      Yahoo - I'd do anything for Marissa (https://en.wikipedia.org/wiki/Marissa_Mayer). I doubt they pay any tax (you need to make a profit first).

      Duck Duck Go - will they be around in 2014 ? (http://duckduckgo.com/)

      1. Anonymous Coward
        Anonymous Coward

        Re: He Said, She Said

        Don't Duck Duck Go use google?

    2. mjwalshe

      Re: He Said, She Said

      A whole 1000 people :-) i once heard a bt manager say that they needed another 800 FTE's on a single project.

  14. Anonymous Coward
    Anonymous Coward

    Correction

    Turnover was not £395M (if it were then a £6M could be correct). The article should read a PROFIT of £395M.

    1. Jon Press

      Re: Correction

      It's largely irrelevant. Profit, for international companies at least, is pretty much what you decide it to be. You ship your expenditure and revenues around the international tax system until you magically realise a small profit in the country with the lowest rate of corporation tax.

      The answer is to tax turnover (in the UK) - it's much harder to hide or divert offshore. We already have business taxes that are not based on profit - employers' so-called NIC and business rates for example. Roll it all into one, simplify the administration and compliance. If you then want to give companies a tax break, you can do it against investment in equipment, R&D, training or whatever positive activities you like. Anything else just results in the system being gamed.

      1. Nick Leaton

        Re: Correction

        That's what the current set up is. You offset all your expenses against your income. You pay tax on the difference. That difference is called profit.

        Now how about taxing BMW on their profits. They are paying their tax in Germany, not in the UK.

        Mind you, the Germans might decide they can raise tax from Rolls-Royce.

        1. Yet Another Anonymous coward Silver badge

          Re: Correction

          >You offset all your expenses against your income.

          So Microsoft makes a loss in the US because it has to pay a licence fee to Microsoft Licencing Inc (Bermuda) for every copy of Windows it sells.

  15. g e
    Stop

    If it's legal

    Then it's legal.

    How many commenters here would seriously, voluntarily fork over another £1 million of their earnings (assuming you were fortunate enough to be in e.g. Jimmy Carr's position, etc) to uk.gov if they didn't have to and could just keep it instead.

    Oh of course. All of you would. With great big moral high ground grins on your faces.

    Yeah right.

    1. sabroni Silver badge

      Hmmm..

      ....sounds like someone's been avoiding paying tax....

      Here's another question, how many commenters here would seriously claim they're based in Luxembourg via a contracting company based in Ireland to avoid paying tax on work done in the UK?

      Yeah, of course, all of us do. With great big houses made of gold.

      Yeah right.

      1. David Neil

        Re: Hmmm..

        If I could structure things so that I could, damn right I would

        1. johnnytruant

          Re: Hmmm..

          I would too. I want to pay taxes to make the country better for everyone and not just me. I'm more than happy to support those less fortunate than me through the state (I wish the state was better organised, but that's not quite the issue).

          For me, that's what a civilised, humane person does as part of a modern, progressive society. I appreciate other people have different points of view, and I'm not saying they're wrong, this is just my opinion.

          1. The Axe
            Mushroom

            @johnnytruant

            If you're not happy with the level of tax that you are paying and want to pay more, just write a cheque to the HMRC and send it to The Treasurer, HMRC, 1 Horse Guards Parade, London. They'll send you a receipt so that you can proudly show off that you have paid more tax than you needed to and that you've done it for the good of the country.

            Me, I think the the state is the most inefficient disorganised method of wealth distribution. I would prefer lower taxes, even no taxes for companies. That would mean that the money I give to companies (in return for something) which then means that other people are employed in providing me with that something actually goes to the employees rather than to the state who take their cut and then pass it on to the workshy. The state thinks it's gainfully employing people, but a lot of them are diversity and equality officers and climate change officials - in other words a waste of space.

    2. lurker

      Re: If it's legal

      Jimmy? Is that you?

    3. Anonymous Coward
      Anonymous Coward

      Re: If it's legal

      "How many commenters here would seriously, voluntarily fork over another £1 million of their earnings (assuming you were fortunate enough to be in e.g. Jimmy Carr's position, etc) to uk.gov if they didn't have to and could just keep it instead."

      Me. Because in any other country in the world I would not have had the education to get there, nor the free healthcare that perhaps allowed me to be alive long enough to do so.

      Don't judge me by your own morals. I feel that I have a debt to this country that is reflected by a chunk of my earnings. I'd be a lot happier though if I wasn't the poor mug paying my share and reinvesting in the future economy while others work hard to dodge it.

      1. Mr. Great Sage

        Re: If it's legal

        @ AC

        "Me. Because in any other country in the world I would not have had the education to get there, nor the free healthcare that perhaps allowed me to be alive long enough to do so."

        1.) There are plenty of other countries that provide good education. Though I understand your point in that you feel your patriotic duty to continue to provide that education to other citizens.

        2.) Healthcare isn't free. Your paying for it, it's just not labeled as "Healthcare" on your taxes.

        1. Anonymous Coward
          Anonymous Coward

          Re: If it's legal

          2.) Healthcare isn't free. Your paying for it, it's just not labeled as "Healthcare" on your taxes."

          Healthcare is free when I need it most, without condition, nor waive for age or existing illness. And nothing is more important in life than one's health.

          "1.) There are plenty of other countries that provide good education. Though I understand your point in that you feel your patriotic duty to continue to provide that education to other citizens."

          And all the other things that my country has provided me with over the years: A safe environment in my younger years, green fields, roads that aren't full of holes [*rising strains of 'Jerusalem' in the background*], free speech, a vote, internet, money when times were desperate, potable water, et cetera: All the things that I've not seen another country on Earth provide so well for it's inhabitants. What I owe my nation isn't limited to a set number of thousand pounds per year, but is indeed a fair proportion of my income. I don't begrudge it (despite having no kids, attending Public School for half of my education, never having gone to uni, never spend a night in hospital (touch wood) and never being a long-term benefiter of social security, and hence 'not getting my fair share' in many's eyes). I just want to see it fairly levied from all.

          Maybe people who are happy to live here but see that it should be free or less for them because they have money should just piss off to Ireland or somewhere in the Pacific and bring their kids up there, if they only want to pay tax there.

          1. Mr. Great Sage

            Re: If it's legal

            @ AC once again

            "Healthcare is free when I need it most, without condition, nor waive for age or existing illness. And nothing is more important in life than one's health."

            If you're in the US (which you may not be. Forgive the assumption if you're not.) this statement is false when it comes to age and illness. I specifically know a an elder gentleman that are now being refused dialysis to keep him alive. His literally words to me were "I guess I'll just go home and die now". This is a direct result of the 'affordable healthcare' law. I can also tell you that personally my insurance premiums have gone up significantly for less coverage. The birth of my little girl went from costing $300 out of pocket (had she been born in '11) to costing me $2,000 out of pocket. Again thanks to the same law.

            If your from another country, I'm glad you're healthcare system seems to be working so well for you. I can tell you from both happenstance and personal experience, ours has been royally messed up, and we're now paying an arm and a leg for it.

    4. h4rm0ny

      Re: If it's legal

      I would. And in principle I do. I could save money by avoiding paying some of the tax I do in the UK (note, that's avoid by legal means, not evade by under reporting etc.) It's not the £1million you use in your example, but I voluntarily pay tax that I could get out of. The reason being that whilst there are legal ways out of it, I don't see it as ethical to get out of the tax.

      Not everyone thinks like you do whether you believe it or not.

  16. Androgynous Cupboard Silver badge

    Wrong approach

    MPs make laws that determine whether something is illegal, but when policing morality they're on exceptionally shaky ground.

    Perhaps they should stop fucking about with this public name-and-shame game and rewrite the tax law instead.

    1. g e
      Facepalm

      Re: Wrong approach

      Absolutely, except then the idiots have to balance it off against how many taxable entities take ALL their money out of the country as a 'stuff you' for removing the only incentive to keep any money in the UK/wherever in the first place.

      They've made a rod for their own back, as usual, and getting beaten with their own stick. The carrot, as ever is still absent from the whole damned equation (did the UK ever have one, been too long used to the stick to remember?)

    2. Field Marshal Von Krakenfart

      Re: Wrong approach

      do you mean like the way David Cameron's thinks its morality wrong for Jimmy Carr to avoid tax via the K2 tax avoidance scheme, but it's OK for Gary Barlow because he's conservative supporter?

  17. Steven Jones

    MP grandstanding rather than doing their jobs properly

    Yet another misleading, sensationalist article by which appears to be doing so by deliberately conflating turnover with corporation tax and comparing a 1.5% "duty" directly with 24% corporation tax. The latter is, of course, paid on profits and not on turnover.

    This is not to say that there isn't an issue here. Tax law has undoubtedly not kept up with many aspects of online business. In the case of on-line advertising, perhaps the government might consider bringing forward a tax on the turnover of advertising in the UK. The technology exists to get a very good estimate of where on-line advertising is being targeted and the related turnover (after all, it's related to the way Google will bill advertisers). Companies offering on-line advertising (or similar intangibles) could be faced with effective bans on doing UK business should they not co-operate and try and stay outside of UK tax administration for the purpose of assessing turnover.

    Also, taxation is based on turnover then that also makes it rather more difficult to avoid than using profit figures which are inevitably going to be based on international company structures and where they choose to be based.

    Of course it may be possible that there's some EU tax law which will make such a thing difficult, but perhaps the MPs should give some consideration to the fitness and effectiveness of the laws they pass rather than grandstanding over "morality" issues which are really just issues of commercial management.

    1. diodesign (Written by Reg staff) Silver badge

      Re: MP grandstanding rather than doing their jobs properly

      "Yet another misleading, sensationalist article by which appears to be doing so by deliberately conflating turnover with corporation tax"

      Never attribute to malice that which is adequately explained by stupidity, or so the razor goes. The article has been amended.

      C.

  18. John A Blackley

    "moral"?

    What on earth is "moral" about taxes? The government demanding money with menaces?

    And who are politicians to lecture anyone about morality - fake or not?

  19. Gordon Pryra
    FAIL

    Whats the news in this?

    Big hotels company I worked for has the list of their companys on a screen in their reception, it flicks over seemingly forever.

    A few hundred companys set up all "earning" under the 60k or so required so they dont have to be VAT registered.

    People who earn large amounts in this country do not pay tax, we know this. While Jimmy Car made himself an easy target by being to cocky, we KNOW the majority of them do the same or use similar schemes.

    I would suggest that most Politicos are in the same boat, set up as a limited company in the same way and thiething the country as much as everyone else is.

    The trouble is its not something that the normal person can do, you need to bring in a certain amount to make it worthwhile, but after that its plain off shore sailing.

    If you can afford a room full of accountants to manage the books on 3-400 little companys you can save billions in either not paying VAT or by not charging it to your customers while your competors do.

    unless your a famous football manager, when you can end up in front of the beak and just laugh, plead ignorance and come out being polled as the next england football manager.

    We laugh at Greece for not paying taxes and crying, but if the average UK tax slave realised that, actually, only little people do pay taxes then they would be crying too.

  20. Magister

    Taxation

    A quote from a previous Lord Chancellor - "Taxation is an enforced extraction, not a voluntary contribution. No-one is under any obligation, legal or moral to arrange his affairs for the benefit of the taxman". The same applies for companies.

    Part of the issue is that the tax law changes with every Budget (or even interim Budget) and sometimes with the enactment of other laws. The book that is the official HMRC guidelines has more than doubled in size in the last few years; because they make all of the interpretation of the law so complex. And those companies that can, use every means at their disposal to reduce their tax bill. If the law changes, they just look for the loopholes in the new rules.

    Before MPs start whinging about companies not paying tax, they should set out to make the rules simpler to follow and therefore harder to find ways around. But one suspects that they are not too keen on that; after all, they often use the same tactics to avoid paying tax themselves.

  21. Anonymous Coward
    Anonymous Coward

    What do you expect? Google is the next Microsoft.

  22. ukgnome Silver badge

    Same old blue meenies

    The failing economy is due to the tax avoidance of global brands like Google.

    What's that Vodafone, no no that's quite OK

    Sometime it makes you wonder who the politicians friends are.

    **Thanks to some tax avoidance, last year I officially earned 12K - although the stress of accounting for everything was very tiresome, hence why I am now an employee again.

  23. JulianB

    The government makes the rules; the companies obey them(1). The rules effectively say "If you're based in the UK, you pay this much. If you're a subsidiary of an Irish company you pay that much. You choose.". Up to the MPs to get the rules right rather than whinge about it.

    (1) OK, some don't, but that's a different issue.

    1. Tom 7 Silver badge

      The companies make the rules

      JulianB wake up!

  24. Anonymous IV
    Thumb Down

    "Don't be evil" is in the Google Code of Conduct

    But there's nothing about "doing good"...

  25. Anonymous Coward
    Anonymous Coward

    Vodafone

    Vodafone are another one - they pay sod-all tax, and they are supposed to be a British company!

  26. shyted

    Let me guess Google hasn't been wining and dining the right people, who else would like to see the tax avoidance figures for the music and movie industries?

  27. Maty

    Nice to see MPs getting uptight about immoral tax avoidance. Pity they don't feel the same way about immoral expenses claims.

    Hypocrites.

  28. Robert Ramsay
    Flame

    WHAT ABOUT GODDAMN VODAFONE?!!

    That is all. Thank you.

  29. Schultz
    Stop

    An MP in London, yelling about tax avoidance, come again?

    So it's that very parliament that created a banking haven in London -- allowing Big International Finance to bypass pesky local taxes and regulation in other countries -- that wants to query Google over some pithy hundreds of millions of profits?

    Is that sanity returning into politics, or is it just a nice case of "don't do to us what we do to you"?

  30. mark l 2 Silver badge

    Perhaps we should actually cut or corporation tax rate so that companies will start paying more taxes in the UK rather than Ireland?

    The obvious danger is that the more you make large business pay the less likely they are going to want to do business here, is there anything stopping google pulling out of the UK completely? Do they really need staff and offices in the UK?

  31. Pellinor

    Not more of this rubbish.

    Tax is on profit, not turnover. £6m tax suggests £25m profit, which is a margin of what, 6%? Sounds OK, given that all Google do in the UK is tout for advertising. No risk in that, so there should be no margin. All the value comes from the US: Google UK would be nothing without it.

    If the MPs don't understand that, they really shouldn't be investigating anything.

    Never mind the question of what the £6m is: accounts tax charge, or tax paid, or what? If it's tax paid and there's been anything in the way of capital allowances or R&D, then what do you expect?

  32. Alan Brown Silver badge

    turnover != profit

    Which is why so many tech outfits are bleeding red ink with multimillion dollar turnovers (and so are more than a few milk producers).

    Don't forget your management translation babelfish.

    "profit" = profit

    "profit before tax" = loss

    "deficit" = staggering loss

  33. Oli 1

    Make it illegal then....

    They arent breaking the law...

    When will the MP's get it in their heads?

    If you want them to pay it, make it law! Simple.

    If they then evade tax, you have a path for recourse. This whole "morality" non-sense is rich coming from the "duck house crew"

  34. The Axe

    Tech site

    This is a technology site and it shows. Many of the commentators know very little about how taxation really works, how companies work, and the legal systems involved.

    Even I don't know much. But I do know that Google are following the law to the letter and to the spirit. They are not doing anything illegal, cause if they were they would have already been up in court.

    And morality doesn't come into the equation. There is nothing immoral about paying less tax as much as there is nothing moral about paying more tax than you have to. The law is not a moral compass. If it was then homosexuality would never have been illegal.

    Just because Ireland is getting Google's tax money doesn't mean that UK politicians have start crying and saying it's not fair. If they want Google, or any other company's taxes, then lower the tax rate to make it attractive for companies to set up HQs here. The UK is in competition with Ireland and every other country in the world for tax money. The UK is NOT entitled to tax money, it has to work for it.

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