A Labour politician is threatening to bring Google executives before MPs to explain the company's tax arrangements after it emerged the technology giant paid just £6m tax on UK revenues of £395m.

John Mann, a member of the Treasury Select Committee, said it was 'entirely improper and immoral' that Google should pay so little tax, according to the Independent.

'I think it would be highly appropriate to pull a Google executive in front of the Committee to justify their failure to pay proper taxes,' Mann said.

Eric Schmidt, Google's executive chairman, has previously defended its UK tax affairs, suggesting paying more would be a voluntary decision that shareholders would not approve.>

Schmidt said: 'We could pay more tax but we would have to do so voluntarily. It's very good for us, but to go back to shareholders and say "We looked at 200 countries but felt sorry for those British people so we want to [pay them more]" ... there is probably some law against doing that.'

Google's British operation is run as an agent of its Irish subsidiary, meaning it only pays tax on 10% of its earnings. Google Ireland then pays much of the money it makes to the internet company's Bermudan firm as a licensing fee, ensuring that a large portion of its turnover ends up in the tax haven. While this approach is legal, Mann said the Treasury Select Committee should investigate such schemes.

A Google spokesman said: 'We make a substantial contribution to the UK economy through local, payroll and corporate taxes. We also employ over a thousand people, help hundreds of thousands of businesses to grow online and invest millions supporting new tech businesses in East London. We comply with all the tax rules in the UK.'

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