UK govt to quiz Google on whether it was ‘economical with the truth’ on tax

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The British government, which previously questioned Google’s tax arrangements in the country, is to call the company back in to determine whether it has been “economical with the truth” in its previous responses, reports Reuters.

Last November, Google claimed that the reason it paid just £6m tax in the UK on a turnover of £395m was that all its Adword sales to UK customers were handled by staff based in Ireland, Google spokesman Matt Brittin openly admitting that this was to reduce tax payments. A Reuters investigation now casts doubt on this claim …

Google’s own corporate website claims sales teams are based in London, and advertises jobs for London-based sales staff, whose duties include “negotiating deals”, closing “strategic and revenue deals” and achieving “quarterly sales quotas”.

Interviews with more than a dozen customers and former staff, and an examination of job advertisements, CVs and endorsements on networking website LinkedIn show many roles that go further than marketing, to actually target, negotiate and close sales of Google’s advertising products.

“All the people you tend to deal with are in London,” said Simon Andrews, founder of advertising agency Addictive, whose business plans and buys advertising campaigns on behalf of clients. “You would never know about the Dublin thing apart from if you looked closely at the address on the invoices. All the people are based in London.”

Both Google itself, and its auditors Ernst and Young, are now to be called back in front of the UK’s Public Accounts Committee to explain this apparent discrepancy. Committee chair Margaret Hodge told Reuters: “We will need to very quickly call back the Google executives to give them a chance to explain themselves and to ensure that actually what they told us first time around is not being economical with the truth.”

Google denies any wrong-doing, standing by its statement that no sales are concluded in the UK and blaming the issue on ‘confusing’ job titles in advertisements.