Google Ordered Back To UK Parliament To "Explain Itself" Following Investigation

DavidGilbert99 writes "Last November Matt Brittin, Google's European chief gave a pretty convincing account of himself as he tried to explain why Google wasn't paying more tax in the UK. All the sales staff were based in Ireland apparently and the UK-based staff were there just to promote the platform for advertisers. Great. Nothing to see here. Move on please. Well, actually there is a little more to the story, as an investigation by Reuters has discovered. There are many sales staff in the UK with titles and responsibilities curiously close to what most people would call sales staff and as a result Mr. Brittin will once again have to face Margaret Hodge and the PAC to explain just what is happening."

Re:Why explain himself?

[beelsebob]

"Explain himself" is british english for "to face a bollocking".

VAT does not work like that.

[tuppe666]

We have a tax like that already - VAT

VAT does not work like that. VAT is paid by the Final Customer, The businesses in between don't pay. What you may be getting confused over is the HMRC *collect* the net of incoming VAT and outgoing VAT until it is finally paid in full by the final customer. Businesses essentially pay nothing.

There is a nice explanation and example at wikipedia http://en.wikipedia.org/wiki/Value_added_tax [wikipedia.org]

Re:Why explain himself?

[Anonymous Coward]

That's not how the law is written. The money that is being charged for the ads are paid to the Irish subsidiary. Therefore Irish taxes apply. There's no legal definition for what it means to "make a sale" in that regard and the location of the first person you talk to on the phone makes no difference. Otherwise if you call up a company and your purchase is handled by an Indian call center, is the sale suddenly taxable in India now even if you're a Brit and pay a British company? No, that's not how tax works.

If someone thought the law was actually being broken, then the right thing to do is for HMRC to prosecute. Not summon random executives to "explain themselves" to Parliament. That's a waste of time that is guaranteed to achieve nothing.

I thought the whole point was for the Parliament to understand what is happening, and use that to consider adjustments to tax laws to address some of the current weaknesses that allows extreme (but today legal) tax avoidance. That is not a matter for HMRC, that is what the Parliament should be doing.

Re:Why explain himself?

[BasilBrush]

A false smear from an AC, repeating the tax cheats excuses.

Margaret Hodge owns shares in Stemcor. Stemcor's effective tax rate over the last 5 years was 32%. Google's effective tax rate was 8%. Google's UK effective tax rate was 0.4%.

Re:It usually works like this

[rednip]

Most bad government has grown out of too much government. - Thomas Jefferson

Whenever I see a quote like that attributed to Thomas Jefferson, I always [use a popular internet search tool] to find more often than not that it's simple right wing fantasy. Why am I not surprised, that it's fake? [monticello.org].

Here are some more things to chew on:

• All of our founding fathers spent their entire lives as politicians both during the colonial era and after the revolution. The idea that they were somehow 'afraid of government' is ludicrous.
• The idea that revolution was 'a bunch of farmers with their personal guns' is ridiculous, it was funded by state governments (Continental Congress) and supported by the French crown.
• Thomas Jefferson didn't write the Constitution, nor the bill of rights, as he was minister to France that entire time, he wasn't even on the committees. Was he really even a 'Framer'? Also, for all his views, when given the chance as a President he governed with an expansive view of both executive and federal power.