The going rate
> worth a cool £1bn
and they'll still only pay a couple of quid in business rates on the building
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 …
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.
>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
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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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.
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?
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.
"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.
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.
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!
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.
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.
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.
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.