Google’s UK division paid £12m in corporation tax in 2012

Eric Schmidt, Google’s executive chairman, has repeatedly said that Google
pays the tax it is required to by international law. Sources at the company
say politicians should set tax rates, and should consider Google is located
in Ireland, in part because of its attractive tax regime.

Google points out it has made a £345m property investment in the UK, including
a new campus at the redeveloped King’s Cross in London. It also claims that
its overall 2012 total UK tax contribution is £156.1m.

“We can only pay corporation tax according to the law,” the source
said. The company has 2,000 employees in the UK and pays a global tax rate
equivalent to 20pc, it claims.

Google, however, has been battered by negative headlines around its tax
affairs, and has
twice been called to defend its avoidance of UK corporation tax to MPs on the
Public Accounts Committee, and was forced to deny misleading Parliament over
whether British staff actually sell advertising.

Margaret Hodge, chairman of the committee, has claimed Google’s approach to
tax meant “it did do evil”, contrary to its corporate motto. Mrs
Hodge called earlier in the summer for David Cameron to intervene over
Google’s tax affairs, arguing that the company had a moral obligation to
contribute more to society.

She said it was “no excuse” for the Prime Minister to claim tax
avoidance was a global problem.

But Conservative MP Andrea Leadsom argued last night that HMRC was to blame
rather than big businesses for the wider issue. Speaking at a fringe event
at the Conservative Party conference, Ms Leadsom said the problem was “our
own incompetence”.

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