Google Ordered Back To UK Parliament To "Explain Itself" Following Investigation 176
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."
Googled it? (Score:2, Insightful)
Time to start taxing revenue instead? (Score:5, Insightful)
Corporation Tax is, of course, only levied on the profits disclosed by the company's annual return. So only profitable companies have to pay 23% of their net as tax.
But this encourages the Big Boys to simply shift their profit to other, overseas, divisions, through 'franchise payments' and other mechanisms.
Perhaps it's time to say that any company making over 1 million in annual revenue will pay, say, 5% on its revenue above that level. No discussion of profits. It is much easier to determine how much money a company took-in. What money landed in its UK bank accounts is what is taxed.
Re:Why explain himself? (Score:5, Insightful)
These parliamentary committees exist to investigate issues in society. They have the option of summoning individuals or representatives of corporations to get to the bottom of those issues. If those individuals lie to them (as Google did in this case) then they have the right to recall them and question them hard about that.
Saying it's a waste of time and is guaranteed to achieve nothing is absurd, how the fuck do you think policy gets made if politicians aren't allowed to call in relevant people to explain how things work and to see if they can provide any justification for their position if they lie, or are perceived to be on the wrong side of public opinion?
The whole reason this committee has been pursuing these lines of questioning is to see whether the law needs to change precisely so HMRC can prosecute, but when companies like Google and Amazon come to the committee and either lie, or fail to answer simple questions, then it's not really surprising the committees push them a bit harder for justification is it? The point being that if even after all these chances, even after all this deep questioning they can't provide reasonable answers to questions such as "Why is your corporation tax payment so low, when you make so much profit here?" then yes, the law is going to change, and yes, if they persist after that, they will be prosecuted. The law can't change in an effective way however if MPs don't understand the problem in depth to make sure the changes work, and are relevant.
Re:Why explain himself? (Score:4, Insightful)
Stemcor trades steel. Big old fashioned, heavy to transport, unglamorous steel. In a country where British Steel made losses for decades. And 2011 was in the depths of a recession. Just how much profit do you think they should have made? It's admirable that they made any.
Note that the Telegraph article that you are probably referencing, directly or indirectly says: "However. it is not known whether the company â" which made profits of £65m â" used similar controversial tax avoidance measures criticised in the past by Mrs Hodge."
If it's "not known", and based purely on looking at revenue rather than profit, then it is indeed a smear.
Google on the other hand IS KNOWN to use tax avoidance, and we KNOW they made huge profits on which they paid very little tax, cheating people in countries all over the world.