Google Faces U.K. Tax Criticism

The search giant faces criticism for reportedly channeling revenue through Ireland and paying less than a million in tax on an income of £1.25 billion.

The Sunday Times published a story yesterday claiming that Google was avoiding UK taxes by channeling its revenue through Ireland, where the tax rate is much lower.

According to the story, the Internet giant took in £1.25 billion in revenue in the UK, but paid only £600,000 in taxes. Instead, it’s claimed, the company channeled around 90% of its revenue through Ireland, where the tax rate is just 12.5%, as opposed to 28% in the UK. On top of that, Google reportedly avoided a further £119 million in taxes in Ireland because its Irish subsidiary is owned by one of two companies Google has set up in Bermuda, which is a tax haven.

Vince Cable, deputy leader of the UK Liberal Democrat party said:

"The reality is, the more tax that companies like Google avoid, the more the tax burden falls on the rest of the public. It is clear that while Labor and the Tories have been embracing Google as the paragon of a 21st-century company, it has been running away from the taxman."

A spokesman for Google said the company would not respond to the accusation “at this time” but did note:

"Google complies fully with the tax requirements in all the countries in which we operate. In the UK and elsewhere we make a very substantial contribution to local and national taxation. In addition, we provide employment for hundreds of people in the UK and many more across Europe."