Original URL: http://www.theregister.co.uk/2013/05/10/google_tax_date/

UK MPs tell Google: Get back here and bring your auditors with you

Choc Factory and E&Y to be hauled in front of PAC next week

By Brid-Aine Parnell

Posted in Government, 10th May 2013 12:04 GMT

The UK's Public Accounts Committee has said that it will be hauling Google and its auditor Ernst & Young back in front of MPs to answer further questions about its paltry British tax bills.

The PAC said on its website that Matt Brittin, Google veep for sales and ops in Northern and Central Europe and John Dixon, head of tax at Ernst & Young would both be recalled to give evidence on Thursday next week.

The decision comes after a Reuters investigation claimed there were "inconsistencies" in how Google portrays its activities in Britain.

Brittin told the PAC that UK workers provided sales, marketing and R&D support to Google's European HQ in Dublin. However, the investigation pointed to job ads, endorsements on LinkedIn and the firm's website which all suggested employees in Britain were actually negotiating deals themselves. If the PAC finds that Google is making sales in the UK, then the ad giant is liable for tax on deals closed by its London-based staff.

PAC chair and Labour MP Margaret Hodge said last week that both Google and its auditor Ernst & Young would be recalled. The auditor's John Dixon told the committee that his beancounters strolled around the offices of clients to check on what clients' staff were doing. Hodge said that there were questions about whether the firms had been "wholly open".

Google said that the Reuters report was "wilfully misleading".

"As we told them in our statement, Matt Brittin clearly explained the roles of UK staff in hours of evidence to the Public Accounts Committee," a spokesperson spluttered indignantly.

"He said ‘if [customers] want to buy advertising from us they are encouraged to do so by our people in the UK - they will buy it from our expert team in Dublin... the people on the ground [in the UK] are helping people make the most of the web and the people in Ireland are helping to operate the systems and sell advertising to the businesses that want to work with us'."

The committee has not found any actual legal wrongdoing on the part of any of the firms, including Amazon and Starbucks, it's grilled so far, although it has said that the multinationals' behaviour has been "immoral". While tax evasion is illegal, tax avoidance is entirely legal. ®