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MPs slam Google’s £130 million tax deal

James Pearce
January 24, 2016

Android-maker agreed to pay UK back taxes but deal labelled “derisory” and “a sweetheart deal” by critics

Google has agreed to pay £130 million in back taxes in the UK, but the deal has been labelled derisory by critics.

Chancellor George Osborne said the US search engine had agreed to the payment following a six-year enquiry, hailing the deal as a “victory” for the government.

The payment covers money owed since 2005, but Labour’s shadow chancellor John McDonnell claimed the sums were trivial.

According to the BBC, Meg Hillier, chair of the Commons Public Accounts Committee, said it was “a small amount of money” for Google.

In 2014, the Android-maker declared sales of £4.5 billion in Britain alone. According to the Tax Justice Network, Google should ordinarily be paying more than £200 million in corporation tax every year.

McDonnell said: “It looks to me from all the independent analysis that this is relatively trivial in comparison with what should have been paid. In fact one analysis has put the rate down to about three per cent, which I think is derisory.”

Osborne defended the deal, saying it was “a real vindication of this government’s approach”, but he added that details of the deal were “confidential”.

“These are taxes paid on profits when there was a Labour government,” the chancellor added. “Not a single penny was collected and now to have Labour politicians complaining about it is a bit rich.”

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