Efforts by Google to Avoid Tax Published by MP report

Introduction: A published MPs report alleges that Google has avoided taxes thru questionable tax arrangements.

As Chair of the Committee of Public Accounts, the Right Honorable Margaret Hodge (Member of Parliament) revealed that large internet company Google paid the UK government merely $16 million in taxes despite having accrued substantial turnouts of $18 billion from 2006 until 2011.

According to the MPs report, in an apparent bid to avoid paying taxes, Google allegedly sought refuge from paying its tax obligations to the UK government by focusing its advertising sales outside the UK, specifically in Ireland. Former employees of the giant internet company have revealed that staff based in the UK participates in the company’s advertising sales efforts, thus making the company’s argument highly questionable. In defense, Google strongly contended before the committee that it had practiced arrangements for settling its taxes with the UK government in a tenable and legitimate manner according to established tax codes. The company also agreed that its engineers perform product development in the UK, which renders indefensible its argument for its overly planned tax structure. This arrangement, according the MPs report, was Google’s method to avert paying established corporation taxes to the government of UK.

The allegations of avoidance of taxes against Google and several other large multinational corporations, such as Amazon and Starbucks, have not been centered on the company alone, as they have also rendered questionable Her Majesty’s Revenue and Customs (HMRC) office. The bigger problem lies in large accountancy companies that offer spurious configurations for avoidance of taxes to the UK government.

Conclusion: The reputation of large multinational companies has been damaged by the promotion of artificial tax structures by big accountancy firms in the UK.