Google on Tax Avoidance: 99% Of Customers Have No UK Contact

Google vice-president Matt Brittin has said that nearly all companies spending money on advertising with the technology giant have no contact with its UK branch when closing a deal.

Speaking at the Public Accounts Committee (Pac), Brittin, Google's vice-president for sales and operations in northern and central Europe, hit back at politicians who claim the company has been aggressively avoiding paying the right amount of corporation tax.

Referring to his previous appearance before the Pac six months ago, Brittin said: "Everything I said back in November is true. Literally 99% of the companies paying for advertising with Google do not have contact with the UK.

"No money changes hands in the UK. Firstly, the rights to what we sell and are sold are owned by Google in Ireland, under intellectual property rights.

"We are talking about buying advertising on a platform created in the US. In the UK, we cannot sell what we don't own, we cannot agree a price, we cannot agree on volume discount and we can't close a deal from Britain."

Google is under fire from politicians and the public for only paying £6m in corporation tax in 2011, despite recording annual revenues of £2.5bn in Britain that year.

From 2006 to 2011, Google generated £11.8bn in UK revenues.

Last November Brittin met with the Pac and defended Google, saying the group was not taxed on the profits of its core advertising business in Britain, because all UK sales were closed in Ireland.

Six months on from that appearance, politicians opened today's meeting by stating, "it is a serious offence to give false evidence and can be considered contempt at the highest."

"Since you last gave evidence in November we have been approached by whistleblowers that we have met," said committee chairperson Margaret Hodge.

"We have evidence that show clear discrepancies from [your evidence in November] and what actually happens on the ground [at Google]."

Lawmakers argued with Brittin on the difference between selling and closing a deal. Britten reitterated that "selling" incorporates many different faculties but no prices or deals are agreed and closed in the UK.

Politicians say whistleblowers revealed that advertising was sold from the UK and have invoices to prove this.

However, they repeatedly refused to give dates and times of the transaction or show Brittin the documents.

John Dixon, Head of Tax at Ernst and Young, was also asked to talk about Google and its tax avoidance practices.

"I told the committee far in advance, repeatedly, and even the clerk before the meeting started that E&Y cannot comment on Google's case," said Dixon.

Dixon infuriated politicians further by stating, "I can however give some theoretical arguments to explain how tax works."

Dixon asked politicians how they would view UK companies paying a substantial amount of tax abroad. For example, if a British firm did most of its business in Asia, would the UK company be liable to pay a majority of its profit to the Asian country's government, or back in Britain?

MPs said "it doesn't make a difference."

Dixon replied, "it certainly does. It makes a massive difference."