It’s been a difficult week for Google’s UK division. After whistleblower reports made public the fact that the company was paying just over £3 million in tax on UK sales of over £4 million per year, the online search advertising giant has been a major story in both the press and the courts as the government searches for answers.
Matt Brittin, Google’s head of Northern European sales, was grilled during a hearing with MPs over the company’s tax status. Google has claimed that its taxes are fair, as the company’s UK-based sales were managed by employees in Ireland. Several MPs, however, believe that Google’s UK-based sales should be taxed as UK earnings.
It’s an understandable position – after all, Google’s sales were reportedly made from the United Kingdom, with only administrative ‘account closing’ efforts based outside the nation. As the United Kingdom is one of Google’s largest markets, a large scandal could have serious negative consequences for the search firm’s image.
Google’s famous motto – “Do No Evil” – was thrown on its head during recent court proceedings, as MPs declared that Google’s tax policy was evil. Google’s former top-ranked executive Eric Schmidt – currently serving as Google’s executive chairman – plans to meet with David Cameron as part of a technology advisory group.
Spokespeople claim that the meeting has been planned for several months, and that the company’s current tax issues are unlikely to be on the agenda. However, with an extremely large market potentially at stake, Schmidt may certainly see the value in capitalizing on the opportunity to speak directly with the Prime Minister.
Google isn’t the only company to have experienced corporate tax issues. Amazon, one of the world’s largest online retailers, is currently facing claims of tax evasion after a journalistic investigation revealed that many UK-based suppliers worked with the company’s Slough office, rather than its Luxembourg headquarters.
