The Tory MP for Dover, Charlie Elphicke, has recently made statements that Google hasn’t paid any tax, despite making millions of pounds. While speaking to MPs, he said that although Google had revenue of £2.15 billion during the year 2010, with profit of £700 million, no tax had been paid. Elphicke said:
“I am all for the silicon roundabout, but it should not be a magic roundabout, in which going around it twice means not paying any tax or going round it three times, like Google, means turning a massive profit into a tax loss.”
According to Mr Elphicke, the UK tax system needs to incorporate social responsibility from large corporations, especially large multinational companies based overseas. He went on to use Google as an example, although he admitted that the problem was far more widespread. The reason that Google was used as a case in point according to Mr Elphicke, is that its figures are available to the public.
The recent censure of Google followed accusations by entrepreneur Luke Johnson, who said that by avoiding tax the company wasn’t acting in an ethical manner. However, in response Google said:
“We have an obligation to our shareholders to set up a tax efficient structure and our present structure is compliant with the tax rules in all the countries where we operate.”
Outsourcing to a low cost accountants minimises the company tax bill legitimately, ensuring all tax reliefs, expenses and allowances are claimed when appropriate.
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