Google evades tax of £450 mn in Britain: report

LONDON, UK: Internet search giant Google has not paid any tax on its 1.6 billion pound advertising revenues in Britain last year, according to media reports.

The firm, which has a substantial presence in London, diverted all its advertising earnings from customers in Britain to its Irish subsidiary, the Sunday Times reported.

According to the report, Google legally avoided paying more than 450 million pound in corporation tax to HM Revenue & Customs in 2008, as it diverted all its advertising earnings from customers in Britain to its Irish subsidiary.

Recently filed accounts for subsidiary company Google UK Limited show none of the search engine's advertising revenues from British customers were accounted for in the business, despite operations in London and Manchester incurring "administrative expenses" of £177m last year, including a wage bill of £70m, according to a Guardian newspaper report.

However, Google's director of communications in northern Europe Peter Barron said that Google makes a big investment in the UK, with over 800 employees, and it has made a substantial contribution to local and national taxation.

The filed accounts for Google UK Limited show none of the search engine's advertising revenues from British customers were accounted for in the business, though the company's operations in London and Manchester incurred “administrative expenses” of £177m last year, including a wage bill of £70m, said Guardian.

While much of the costs linked to the running of Google's British operations are recognized for tax purposes in the UK; revenues from customers in Britain, however, are diverted to another Google company in Ireland, where the corporation tax rate is between 10 per cent and 25 per cent. British corporation tax is levied at between 28 per cent and 30 per cent.

According to Google spokesman, Dublin was Google's European headquarters, pooling revenues from across the continent, not just the UK. He said the competitive tax environment was just one reason why Google, like many other multinationals, had chosen Dublin for its European base.