Google’s UK tax bill jumps from £50m to £200m

The amount of tax Google paid to the Treasury rose from £50 million to £200 million in the past 18 months, according to accounts to the end of December.

Its turnover rose from £1.8 billion to £3.4 billion, with a profit of £896 million, up from £226 million in June 2020.

These figures cover a year and a half as the business moved its accounting period from the end of June.

Google opened its first UK office in 2003 where staff are principally involved in research and development and marketing. It is in the process of developing a huge site in London’s King’s Cross which will have space for 4,000 staff, in a horizontal skyscraper that will be 330m wide. It bought the land in 2013 for £290 million.

This year it spent £788 million buying the Central Saint Giles development in London’s West End where it has rented office space since 2012.

It took on 577 more staff since June 2020, and has 2,275 working on sales and marketing, 2,412 in research and development and more than 1,000 in management and administration

Along with other US tech giants, the company has been repeatedly criticised for not paying enough tax in the UK. Google’s European operation is based in Dublin, where taxes are lower.

A spokeswoman for Google said “Our global effective income tax rate over the past decade has been close to 20 per cent of our profits, in line with average statutory tax rates. We have long supported efforts via the OECD to update international tax rules to arrive at a system where more taxing rights are allocated to countries where products and services are consumed.”

Britain introduced a digital services tax in 2020, levied at 2 per cent of gross revenue of large digital companies derived from users in the country. Last year, the OECD struck a deal to reform the international tax system which will supersede this next year.

The agreement was reached after nearly 140 countries agreed a deal on new rules for international corporate taxation. The reforms are designed to ensure that multinationals pay an extra $100 billion a year in taxes and shift more of their liabilities to countries where they derive their revenues.

Under the new framework companies will pay a minimum 15 per cent global tax rate. The aim is to end competition between countries, under which intellectual property has been shifted to tax havens and profits have been declared in low-tax jurisdictions.

Read more:
Google’s UK tax bill jumps from £50m to £200m