‘Immoral Google cheated taxpayers out of millions’
By Tom Kelly From iol scitech
London – A former Google executive on Sunday accused the company of cheating taxpayers out of hundreds of millions of pounds with an “immoral” tax avoidance scheme.
Barney Jones, 34, described how profits on deals completed in the UK were processed in Ireland, where the corporation tax rate is lower.
The whistleblower, who worked for the Silicon Valley giant between 2002 and 2006, is ready to hand over more than 100 000 emails and documents to HM Revenue & Customs, detailing what he claims was a “concocted scheme”.
Mr Jones said: “The real victims are ordinary taxpayers in Britain who are being cheated. Google has pulled the wool over the eyes of HMRC and the British population. Google has prided itself on being a socially responsible company and to pay your tax is the most fundamental responsibility. This is a betrayal of everything that Google stands for.”
Mr Jones has already provided testimony to the Commons public accounts committee about Google, which has the informal motto ‘Don’t be evil’.
His evidence resulted in the heated questioning of Google vice-president Matt Brittin last week, during which committee chairman Margaret Hodge accused his company of doing “evil” and using “smoke and mirrors” to avoid paying tax.
Mr Jones told the Sunday Times that Google’s London sales staff negotiated contracts with British customers, and cash was paid into a UK bank account.
But he said the deals were technically booked through the company’s Irish office, where corporation tax is just 12.5 percent compared to 23 percent in Britain.
Google recorded revenues of £11.9-billion between 2006 and 2011, according to American stock market filings. But by booking its UK sales through Ireland, it paid only about £10-million in corporation tax during the period. Father-of-four Mr Jones said: “To try and fool people into thinking that you are not making money in a country where you are is absolutely scandalous.
“When I was at Google, our job was to find advertisers, to close the deals [and] to get them to sign bits of paper saying they were committing to spend in the UK. If that is not closing the deal, I don’t know what is.
“Google uses a concocted scheme to avoid tax. It’s a smokescreen to distort where the substance of its economic activity is really taking place.” Mr Jones also accused the tax authorities of being ‘asleep at the wheel’ and said they should have challenged Google years ago.
During a two-hour interrogation by the Commons committee last week, Mr Brittin eventually admitted that “a lot of the aspects of selling” took place in the UK, but all sales were processed and billed in Ireland. A spokesperson for Google said: “It is difficult to respond fully to documents we have not seen.
“These questions relate to Google’s business in the UK going back a decade or more and don’t change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.”
David Cameron has written to Britain’s overseas territories calling on them to crack down on tax evasion and aggressive avoidance.
Ahead of next month’s G8 summit, the British prime minister said tackling the issue was a “priority” for the UK at the meeting with world leaders and a “critical moment to get our own houses in order”. He wrote: “Put simply, that means we need to know who really owns and controls each and every company.
“This goes right to the heart of the ambition of Britain’s G8 to knock down the walls of company secrecy [through] properly managed centralised registries, that are freely available to law enforcement and tax collectors.”
In the letter to the leaders of Bermuda, the British Virgin Islands, Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man, Mr Cameron said he respected their low-tax status.
But he warned “lower taxes are only sustainable if what is owed is actually paid”. – Daily Mail.
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Cameron will NOT challenge Google over ‘evil’ tax avoidance at Downing Street summit
By Matt Chorley, Mailonline Political Editor
David Cameron will not challenge Google’s tax avoidance at a meeting with the web firm’s chief executive today.
Bizarrely the Prime Minister will brief business advisors on his plans for tackling global tax dodging but will not challenge Eric Schmidt over its arrangements which were last week branded ‘evil’ by MPs.
Last year the search engine firm paid only £7.3million in corporation tax on more than £3billion in UK sales.
Mr Cameron hosts a meeting of his elite Business Advisory Council in Downing Street today.
He will set out his plan to use the G8 summit in Northern Ireland next month to crackdown on international tax havens.
But Downing Street said he will not address concerns about Google’s tax affairs, which were torn into by the Commons spending watchdog last week.
During more than an hour of intense questioning, Google boss Matt Britten was repeatedly warned he was at risk of misleading Parliament, after denying that sales staff based in Britain were actually involved in ‘selling’, insisting deals were closed through its offices in Ireland.
Business Secretary Vince Cable backed ‘public outrage’ at multi-national firms like Google and Amazon who use legal but ‘unethical’ means to avoid paying tax.
However, the Prime Minister’s officials spokesman said he would not comment on companies or individuals, despite once branding the comedian Jimmy Carr’s tax avoidance as ‘morally wrong’.
‘The Prime Minister will be taking the group through his G8 agenda. Tax and tax transparency are at the heart of that,’ the spokesman said.
Asked whether the PM will specifically raise the concerns about Google’s tax arrangements, the spokesman said: ‘We don’t talk about individuals’ or individual companies’ tax affairs.
‘What the Prime Minister will be doing at that meeting today is explaining the tax transparency part of the G8 agenda which he has been discussing with other G8 leaders and will discuss again at the European Council this week.
‘He certainly is going to raise tax and reform of global tax rules including the ones under which multi-nationals operate. He is going to raise that with the entire Business Advisory Group.
‘When it comes to companies, companies should pay their tax.’
Mr Cameron will set out in detail the work which the UK has been doing in partnership with Germany, France, Spain and Italy on automatic exchanges of tax information.
While refusing to challenge Google, the PM has written to the leaders of Britain’s offshore tax havens stressing the need to ‘get our own houses in order’.
In a message to 10 crown dependencies and British overseas territories Mr Cameron said he backed their right to be low tax jurisdictions but insisted that rules needed to be set and enforced fairly.
He said he wanted the G8 to ‘knock down the walls of company secrecy’ to reveal who really owns and controls firms.
The Prime Minister’s letter calling for more transparency about tax information and the ownership of companies was sent to leaders in Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands Jersey, Guernsey and the Isle of Man.
Mr Cameron wrote: ‘As you know, I have made fighting the scourge of tax evasion and aggressive tax avoidance a priority for the G8 Summit which the UK is hosting next month.
‘With one month to go, this is the critical moment to get our own houses in order. I am looking to all the overseas territories and crown dependencies to continue to work in partnership with the UK in taking the lead on two critical issues: tax information exchange and beneficial ownership.’
He told the leaders: ‘I respect your right to be lower tax jurisdictions. I believe passionately in lower taxes as a vital driver of growth and prosperity for all.
‘But lower taxes are only sustainable if what is owed is actually paid – and if the rules to achieve this are set and enforced fairly to create a level playing field right across the world. There is no point in dealing with tax evasion in one country if the problem is simply displaced to another.’
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