Belfast Telegraph

UK Website Of The Year

How can Google owe just £130m in tax when it's worth £66bn a year? Search me

By Mark Steel

Published 30/01/2016

Shareholder focus: Eric Schmidt, chairman of Google, is proud of the company’s approach to capitalism
Shareholder focus: Eric Schmidt, chairman of Google, is proud of the company’s approach to capitalism

What a simple new tax system the Government has come up with. Instead of filling in complicated forms, executives from corporations such as Google now have dinner with ministers in the run-up to the deal with tax officials and drop hints about how much they fancy paying.

Once this process is extended to the rest of us, it will be so efficient. Window cleaners and plumbers will meet an inspector in Harry's cafe for bubble and squeak, hand over £80 in rolled-up fivers and say: "Here you go sunshine, get yourself something nice."

Then we can try it for all transactions. So you'll wander round B&Q, take some planks of wood and a lampshade you fancy, and instead of paying, a few years later, you give them a Kit-Kat.

We can't know exactly what HM Revenue and Customs agreed with Google's bosses, as the Government refuses to say, so it may be that they handed over a fridge they were chucking out that needs a new door handle, and a pile of Beano annuals they found in the wardrobe.

The inspectors agreed that Google doesn't have to pay much tax in Britain because it doesn't have a "permanent establishment" here. It does have offices with more than 1,000 staff, a cinema and allotments attached to its grounds, but that hardly suggests "permanent" - we all carry stuff like that around when we're just passing through.

Even after the high-ups had the complex built, if they were asked if they fancied a cup of tea, they said: "No thanks, we're not stopping."

Britain, they say, is a "branch office"; their actual office is in Ireland, which allows them to register in Bermuda, where companies pay hardly any tax. They might add that they decided on Bermuda to test their search engine thoroughly. Because even planes and ships go missing in Bermuda, so if Google can find information about who won the Grand National in 1965 out there, it proves its system works under the toughest conditions.

Google's chairman, Eric Schmidt, showed why modern businessmen are suited to be the most powerful characters in society when he said he was "proud" of the way his company avoids paying taxes, explaining "it's called capitalism. We are proudly capitalistic" and adding that it had a "legal obligation to shareholders".

So, Google has a moral, almost spiritual, obligation to pay as little tax as possible. It's heartening to see people in authority stick to their principles, unlike these rogues who pay the full rate of tax and the scum who make their full contribution to fund schools and old people's homes, and Franciscan monks and other sociopaths who go through life without a thought for registering billions in Bermuda for their shareholders.

George Osborne announced the deal as an "enormous success", as it had brought in more money than before, which was nothing. This is a very novel approach to economics from a Chancellor of the Exchequer; any financial arrangement is an enormous success as long as it yields more than nothing.

Having claimed the Google deal as a triumph for the Government, Osborne seemed to change his mind later, insisting that it was nothing to do with the Government, but was arranged entirely with the tax office and "not with ministers".

So it's a puzzle that Google had 24 meetings with ministers, including Jeremy Hunt, Theresa May, half of the Cabinet and Osborne himself.

One couple that must have enjoyed Google's tax deal is the Rutherfords, as they dedicate their lives to looking after their severely disabled grandson. Carers would sleep in their spare room, but under the rules of the bedroom tax, they were faced with eviction. Judges have ruled such evictions unlawful, but the Government will appeal because it is determined that people such as the Rutherfords, who are so selfish that they barely give a thought to their legal obligations towards shareholders, must be evicted to save taxpayers' money.

Maybe the couple should register the disputed room in Bermuda.

Belfast Telegraph

Read More

From Belfast Telegraph