HMRC’s deal with Google, where Google will pay £130m to cover back taxes from 2005, has been called ‘derisory’.
The Public Accounts Committee has called for HMRC to be more robust in challenging mass marketed avoidance schemes, and has urged the government to regulate tax advisers with punitive financial sanctions
Speaking at the World Economic Forum in Davos, George Osborne was pleased with the deal. As per Accountancy LIVE:
"This is a major success of our tax policy. We’ve got Google to pay taxes and I think that is a huge step forward and addresses that perfectly legitimate public anger that large corporations have not been paying tax. I think it’s a big step forward and a victory for the government."
In a statement Google said:
"We have agreed with HMRC a new approach for our UK taxes and will pay £130m, covering taxes since 2005. We will now pay tax based on revenue from UK-based advertisers, which reflects the size and scope of our UK business.However, Meg Hillier, chair of PAC has indicated via Twitter, that MPs will be looking into the issue.
The way multinational companies are taxed has been debated for many years and the international tax system is changing as a result. This settlement reflects that shift and is in line with recent OECD guidance."
Bet individual taxpayers wouldn't get off as lightly as Google on back tax. Cosy deal. Will call HMRC and Google to @CommonsPAC to explain.— MegHillierMP (@Meg_HillierMP) January 23, 2016
Tax barrister Jolyon Maugham, QC, said the latest agreement with HMRC appeared not to have challenged the issue of whether Google has a UK permanent establishment, which would have a substantial impact on its tax position.
"There are reports that the French tax authorities are going to test the question for France. I can’t understand why HMRC isn’t going to ask our courts to decide that question for us."This is an issue that will run and run.
Tax does have to be taxing.
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