Google agrees to pay £130m tax bill

Search giant says it will pay tax according to UK revenues from advertisers

Money

Google has agreed to pay the UK government its 130 million tax bill for the last ten years of its operation in the UK.

The company also agreed to start paying tax according to the law in future, meaning this issue should not come up again. A statement by the company said it would "pay tax based on revenue from UK-based advertisers, which reflects the size and scope of our UK business."

However, the internet giant said it had not been avoiding tax in the past, but had been paying what it believed it owed based on the previous tax laws.

"We were applying the rules as they were and that was then and now we are going to be applying the new rules, which means we will be paying more tax," Matt Brittin, head of Google Europe said.

The news comes as the government has started to crack down on some of the biggest technology companies and retailers in the world, trying to recoup money the corporations have previously avoided paying.

Also under investigation for avoiding paying the tax they owe on revenues from their UK business are Amazon and Apple, who have previously used loopholes in the law to avoid paying taxes on revenues generated in the European Union.

Methods include setting up companies in Luxembourg, Ireland and the Netherlands, which all have more relaxed laws. Additionally, some UK legislation makes it easy for companies to transfer funds into tax havens around the world, including Bermuda.

However, the law changed in January 2015, stating online businesses, such as those targeted by the UK government of late, have to pay VAT in the country of the purchaser rather than the country where the business is registered.

In March, it was added that those who channeled sales into other countries would have to pay a 25 per cent levy on profits too, scraping back some of the money dissipated into some of the world's biggest companies' bank accounts.

Both Amazon and Apple have agreed to pay back a big slice of the money they owed last year and now many of the other companies using these loopholes are agreeing to pay.

Featured Resources

How to scale your organisation in the cloud

How to overcome common scaling challenges and choose the right scalable cloud service

Download now

The people factor: A critical ingredient for intelligent communications

How to improve communication within your business

Download now

Future of video conferencing

Optimising video conferencing features to achieve business goals

Download now

Improving cyber security for remote working

13 recommendations for security from any location

Download now

Recommended

Arizona legislators vote against exclusive app store payment systems
business apps

Arizona legislators vote against exclusive app store payment systems

4 Mar 2021
Google to fund Linux developers to fix kernel security problems
Linux

Google to fund Linux developers to fix kernel security problems

25 Feb 2021
Google releases Android 12 developer preview
Google Android

Google releases Android 12 developer preview

19 Feb 2021
Google’s transatlantic undersea cable ready for service
Network & Internet

Google’s transatlantic undersea cable ready for service

4 Feb 2021

Most Popular

Star Alliance passenger data stolen in SITA data breach
data breaches

Star Alliance passenger data stolen in SITA data breach

5 Mar 2021
I went shopping at Amazon’s till-less supermarket so that you don’t have to
automation

I went shopping at Amazon’s till-less supermarket so that you don’t have to

5 Mar 2021
How to find RAM speed, size and type
Laptops

How to find RAM speed, size and type

26 Feb 2021