The Sunday Times did an expose of Google's tax affairs today.
I'll declare an interest: they asked me to help the investigation, and I did.
The findings? Google has avoided £3 billion of tax worldwide over the last five years. It's tax rate outside the USA is just 3%.
In 2009 if Google had declared profits in proportion to sales in the UK in the ratio that the worldwide accounts showed (about 35% profit pre tax) then the expected UK tax bill would have been about £190 million.
They actually paid £3 million.
Now if that isn't evidence that a) Google does harm even if all it does is legal b) Google is not corporately socially responsible c)Google condones the massive worldwide tax avoidance industry d) H M Revenue & Customs' estimate of the tax gap is nonsense as they would not pick up this difference in their calculations, meaning that they drastically underestimate the tax gap, as I have always claimed.
It's annoying that the Sunday Times is behind a pay wall: this latest expose of Google's tax is further evidence that the issue of tax avoidance is still one that deserves campaigner's attention.
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Are there any big companies that are NOT fiddling their tax?
Well we can agree on one thing, Google’s full of BS when they make their moto “don’t be evil”.
One thing to bear in mind: News International syndicates its content to its other publications. Some of the article at least has been republished in the Australian here – and the Australian has no paywall.
I disagree. It only shows how bad and complex the tax system is. Big players avoid it, small players pay for it. Can it be made simpler and less annoying for big corporations to give them incentive to pay more? There must be a threshold when paying for tax avoidance lawyers and all the structure is more expensive than paying the tax.
All the incentive they need is this:
“We will check your tax affairs properly, and if we catch you fiddling you will go to jail”
Which, in Googles case, will have absolutely no effect at all. The crux of the article (which looks suspiciously like it has been lifted from Jesse Drucker’s article on Bloomberg last year) is that there is no illegality and I imigane that even a GAAR wouldn’t have any UK impact on the structure.
In fairness to all sides, the one consistent aspect to reporting on Google’s tax has been me – and the story first started in the Sunday Times. Jesse took it much further though.
Judge Learned Hand: “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands.”
Oh come on…he wrote / spole at a time when ace discrimination was allowed, homosexuality as illegal, gender discrimination legal and widespread and on, and on and on
Times change
They have on tax too
Time you lot acquired a moral compass