UK corporate tax regime branded ‘national disgrace’ in wake of Google payments

The UK’s corporate tax regime was labelled a “national disgrace” after Google revealed it paid £36.4 million in tax on profits of almost £150 million.

The firm came under fire from the Government last year for not paying its fair share to the exchequer and opposition politicians seized on the latest tax payment as a sign that the US tech giant was still not doing enough.

Google insisted it paid “all the taxes due in the UK” but as an international firm it paid the majority of its taxes in its home country.

Shadow chancellor John McDonnell said: “This revelation only further proves that Philip Hammond and Theresa May are more interested in cutting Google’s taxes, than making sure they are paying their fair share.

“It seems that the so called ‘successful’ tax deal with Google that George Osborne boasted about last year has meant that they are still not paying their fair share under his successor Philip Hammond.

“It is a national disgrace that by paying just £36 million in tax Google could have an effective tax rate lower than many working families in our country. And it exposes the complacency at the heart of this Tory Government, which is allowing this to still continue despite last year’s scandal.”

Liberal Democrat treasury spokeswoman Baroness Kramer said: “It is appalling that Google are still getting away with paying such a paltry amount of their total revenue back in taxes. Our worst fear is that the Tories would use Brexit to turn the UK into a tax haven sitting off the northern shores of Europe, there is no sign that this isn’t where we are headed.

“This Government is already struggling with the Brexit squeeze, if they want to stop cutting vital services they need to start picking up what is owed to the British people.”

Meg Hillier, chairwoman of the influential Commons Public Accounts Committee (PAC), said: “Yet again we see a large corporation paying a rate of tax that belies its significant presence and business transactions in the UK.

“This is why the PAC is working internationally to press for greater tax transparency so that we can all see clearly how much tax corporations pay and where.”

The firm revealed it paid £36.4 million in UK corporation tax on pre-tax profits of £148.8 million in the year to June 30 2016.

A Google spokesman said: “As an international business, we pay the majority of our taxes in our home country, as well as all the taxes due in the UK. We have recently announced significant new investment in the UK, including new offices in Kings Cross for 7,000 staff.”

The tech company paid £46.2 million in corporation tax for the previous 18 months to June 30 2015. That covered an extra six months of business before Google moved to a 12-month accounting period the following year.

Google said both administrative costs and turnover for the period decreased as a result of the accounting changes. Revenue dropped £141 million in the year to June 30 2016 to £1 billion, from just under £1.2 billion for the previous 18 months.