Web giant Google is cheating British taxpayers out of millions

 

Web giant Google is cheating British taxpayers out of millions

A former Google executive turned whistleblower says he has 100,000 emails that expose the ‘immoral’ tax avoidance scheme used by his former employer.

Barney Jones, who worked for Google from 2002 until 2006, said the company has ‘pulled the wool over the eyes of HMRC and the British population’.He claims Google has a system in place which diverts British profits through Ireland to the Bermuda tax haven and accused the company of ‘cheating’ the British taxpayer.The internet giant has been under increasing pressure about allegations of tax avoidance. Prime Minister David Cameron will lead efforts at next month’s G8 summit of world leaders to find ways of preventing multinational firms from exploiting tax loopholes.

He is due to meet Google’s executive chairman Eric Schmidt tomorrow at the quarterly meeting of the prime minister’s Business Advisory Group.Last week, Matt Brittin, a vice-president of Google, was aggressively questioned by MPs, who accused the company of ‘doing evil’ by using ‘devious, calculated and unethical’ tricks to minimise its liabilities.It paid just £7.3million in corporation tax last year despite having a UK turnover of £3billion.Yet, Google assert that all its sales are made in low-tax Ireland, rather than the UK, where corporation tax is just 12.5 per cent compared to 23 per cent in Britain.

Mr Jones’s earlier testimony to the PAC gave MPs such as chair Margaret Hodge further ammunition for the questioning of Mr Brittin last week.He told MPs at a previous meeting in November: ‘No one in the UK is selling’.He again told the public accounts committee that no one in the UK ‘closed’ a deal and that this was done by Dublin staff.Yet Mr Jones said this was a ‘smokescreen’.Mr Jones told The Sunday Times that he won contracts with major companies to buy advertising space in the UK but the deals were ‘closed’ by staff in Ireland.

He told The Sunday Times: ‘It uses a concocted scheme to avoid tax. It’s a smokescreen to distort where the substance of its economic activity is really taking place.’He said he was at meetings where London staff did deals with companies such as eBay and Lloyds TSB.During the two-hour interrogation of Mr Brittin by MPs last week, he eventually admitted that ‘a lot of the aspects of selling’ do take place in the UK.He told MPs: ‘Literally 99 per cent of our UK customers spend their money without ever talking to anyone in Google UK.’But the remaining 1 per cent are the group’s largest customers, and account for more than two thirds of its total sales.

Mr Jones’s testimony will add to the mounting pressure on the Silicon Valley company, which has an informal motto of ‘Don’t do evil’.The company is reportedly spending up to £1million on a lavish weekend for its staff at the so-called Zeitgeist Conference.The company has hired out the Grove Hotel in Hertfordshire, where singer Jessie J will perform.Meanwhile, Labour leader Ed Milliband will write new rules to tackle corporate tax dodgers if he wins the next election, even if there is no international consensus for action.In a statement, Google’s director of external relations Peter Barron said: ‘As we said in front of the Public Accounts Committee, it is difficult to respond fully to documents we have no seen.

‘These questions relate to Google’s business in the UK going back a decade of more.’None of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.’Mr Schmidt, who will visit Downing Street tomorrow, claimed his company ‘has always aspired to do the right thing’ but said ‘international tax law could almost certainly benefit from reform’.

The Tories said David Cameron is prioritising tax law at the G8.A Conservative Party spokesman said: ‘David Cameron is putting tackling international tax avoidance and evasion firmly at the centre of his agenda for Britain’s Presidency of the G8 this year.’The Prime Minister has established links with Google. His former director of strategy was Steve Hilton, whose wife Rachel Whetstone is high up in the internet giant. – DailyMail