HMRC agreed to repay Google £31 million in corporation tax
The taxpayer was hit with a multi-million pound bill from the global search engine, despite Google enjoying billions in sales in the UK, it has emerged.
Two years after the Government promised to recoup millions in unpaid tax from tech giants, Google ended its tax year with records showing it was due a multi-million pound payment from HMRC.
Google owed £25million in UK corporation tax, which is roughly the same it has owed in previous years.
Despite Government promises to crackdown on tax dodging by international corporations, Google’s end of year finances showed HMRC owed it £31,405,901 in “corporation tax”.
Google sources said there had not been a cheque from HMRC but an overpayment by the company had been reflected on the balance sheet. The company said that it paid all taxes that were legally due.
Tax records suggest HMRC has agreed to repay some of the £130million Google owed in back taxes over a decade long period.
Google denies this and has said it paid the required amount in full.
The deal, announced in January, was hailed as a “major success” by George Osborne, the Chancellor at the time.
But he soon faced allegations of a sweetheart deal after it emerged that tax authorities in Italy and France had claimed much more from the internet company, despite Britain being its biggest market.
“Last year we were told that Google had a £130 million tax bill,” Jolyon Maugham, QC, a tax barrister, said.
“This year we owe Google £31.5 million. That has to raise questions about how much tax Google is really paying.”
After the settlement, Matt Brittin, head of Google Europe, promised that the company would pay more tax. “We will now pay tax based on revenue from UK-based advertisers,” a spokeswoman said at the time.