Don Valley MP Caroline Flint has called on the Prime Minister to require companies like Google to publish their tax returns.
Ms Flint is concerned that Google, which had UK revenues of £4.65billion, suggesting a profit of over £1billion in the 18 months up to June 2015 (i), and has done an estimated £24 billion in trade in the UK in the last ten years, has reached a voluntary agreement with the Treasury to pay just £130 million as its contribution to corporate taxation.
Ms Flint told the Prime Minister: “Not everyone is as satisfied as the Chancellor, with what for Google is loose change to cover their tax liabilities. On Monday, the honourable Member for Amber Valley called for Government to make companies publish their tax returns. In that way we can all see how they got from their cash profit to their tax bill. Does the Prime Minister agree?”
The Prime Minister replied: "I do want a situation where we make the rules and : “I do want a situation where we make the rules in this house and the HMRC enforce them.”
UK corporation tax is 20% but experts believe that even with Google’s recent payment, their tax rate will be approximately 3% (ii).
Speaking after the exchange Ms Flint said: “The Prime Minister can avoid a direct answer all he likes. Far from ‘making the rules’, the Government is being given the run around by companies like Google. The issue of fair taxes will not go away while companies like Google use loopholes to reduce their tax bill in the UK. When Google has an offshore cash mountain estimated to be £30 billion (iii), it is time for more openness.”
1.Note Google’s UK revenues and estimated profit reported by the FT 26 Jan 2016.
2.Google’s payment of £46.5m for the above period is an effective tax rate of 3% - see FT 26 Jan 2016
3.The Guardian 26 Jan 2016.