Google’s tax payments in the UK remain controversial a year after it agreed a £130m payment of back taxes to HMRC, with the discovery that the tech giant is now in line for a potential refund on its corporation tax bill
Accounts released for Google UK Ltd show profits of £148.8m in the year to June 30, 2016, with revenues reaching £1bn. The company paid £29.8m in corporation tax on this, while deferred taxes from previous years and other adjustments brought the total tax bill to £36.4m.
The accounts also reference a ‘corporation tax receivable’, a £31.4m payment from HMRC which acts as a refund for an earlier overpayment on an estimated corporation tax bill.
Opposition MPS and the public accounts committee (PAC) say Google is still not paying enough tax, pointing out that the latest accounts filed in the US by Alphabet, Google's parent company, show UK sales of more than £6bn. However, some sales continue to be booked in Ireland, where the tax rate is lower.
Labour shadow chancellor John McDonnell said: ‘It is a national disgrace that by paying just £36m in tax Google could have an effective tax rate lower than many working families in our country.
‘It seems that the so-called “successful” tax deal with Google that George Osborne boasted about last year has meant that they are still not paying their fair share under his successor Philip Hammond.’
Meg Hillier, PAC chair, said: ‘Yet again we see a large corporation paying a rate of tax that belies its significant presence and business transactions in the UK.
‘This is why the PAC is working internationally to press for greater tax transparency so that we can all see clearly how much tax corporations pay and where.’
A Google spokesman said: ‘As an international business, we pay the majority of our taxes in our home country, as well as all the taxes due in the UK.
‘We have recently announced significant new investment in the UK, including new offices in Kings Cross for 7,000 staff.’
HMRC declined to comment on Google's tax payment, saying it did not discuss identifiable taxpayers.
An HMRC spokesman said: ‘Everyone has to pay the tax due under the law and we do not settle for less.
‘Our most recent figures show that HMRC brought in a record £26bn in extra tax for our public services, with £7.3bn of that total coming from the 2,100 largest and most complex businesses in the UK.’
