An influential parliamentary committee has called on HM Revenue & Customs to "fully investigate" Google, after finding that the internet giant uses "highly contrived" tax schemes with the purpose of avoiding corporation tax on its multibillion-pound UK revenues.
In a scathing report, the House of Commons Public Accounts Committee dismissed as "deeply unconvincing" Google's claims that its UK sales activities take place in low-tax Ireland and found that the company's account of its operations made "absolutely no sense".
Committee chairwoman Margaret Hodge branded the company's arguments "brazen" and said the only way for Google to repair its damaged reputation was to arrange to pay a fair share of tax in the countries where it earns its massive profits.
But the report was also highly critical of tax authorities, finding it was "extraordinary" that HMRC did not challenge Google over its arrangements. The cross-party committee also warned that the UK's big accountancy firms had damaged their reputations by helping big business clients avoid tax, calling on them to recognise that "the public mood on tax avoidance has changed".
Google generated around $18bn (£11.5bn) in revenue from the UK between 2006 and 2011, but paid just $16m (£10m) in corporation tax, found the PAC report. During this period, the main rate of corporation tax was between 30% and 26%.