More like this

Business

Arrow

The Channel

Google after six-year tax foot-drag: No they're fine about the fine. We're fine. No fine

£130m tax bill over 10 years biggest settlement outside US

Google UK office logos

Google has not been fined for taking six years to settle its controversial £130m tax bill with the UK's HMRC, the company confirmed in front of MPs today.

Google told the Public Accounts Committee in Westminster, London, it had not been subjected to a fine for taking six years to agree its tax bill between 2005 and 2015, as HMRC accepted it wasn't ignoring the rules but interpreting them in a different way.

Jim Harra, director general of business tax at HMRC, said: "Penalties and large business are a challenge, as they have to demonstrate two things: first that the [original] return was wrong, and it was in this case; and secondly is that insufficient care was taken in the self- assessment."

He added: "It is very difficult to establish they took insufficient care."

Harra said: "I do understand the [public] anger, and I think HMRC and the government position that the current penalty legislation does not work for large companies in the way it should."

Richard Bacon MP noted the process had taken longer than the Second World War. "If it took six years, either you are very bad at explaining or they are very thick in understanding... It seems to me incredible took six years to explain what the internet is," he said.

Tom Hutchinson, a veep at Google, blamed the overly complicated tax system as to why it took so long. He said the six-year investigation was led by HMRC. "I would love to have these rules simpler, so we could explain it to people who are not tax people," he said.

"We have never paid a settlement outside the US as large as the one we have just agreed to."

Committee member David Mowat said: "What concerns not should be taxed on sales, that you come up with a number of contrived mechanisms, the double Irish, the Dutch sandwich, the use of Bermuda [where Google has a branch], which is not completely pervasive among US technology companies."

Hutchison said Google's fundamental structure of invoicing customers via Ireland had not changed since he last appeared in front of the committee in 2013. ®

PS: Matt Brittin, Google's UK-based Europe boss, infuriated the parliamentary committee by being unable, or perhaps unwilling, to reveal how much he is paid. "Out there, our constituents are very angry; they live in a different world clearly to the world you live in," thundered committee chairwoman Meg Hillier.

Sponsored: Magic quadrant for enterprise mobility management suites