Google tosses UK exchequer some crumbs

By John Leonard
08 Aug 2012 View Comments
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Google paid a tax rate of 11.9 per cent in the US last year, according to a report in April from research and public policy organisation the Greenlining Institute, to the annoyance of many American tax campaigners who wonder why the company is not subject to the official US corporate tax rate of 35 per cent.

However, in comparison with what the company pays in the UK, Google is a hugely generous contributor to US coffers. In this country, according to the Daily Telegraph, the search giant paid just £6m to the Exchequer in 2011 on revenues of around £2.6bn, based on the 11 per cent share of worldwide revenues enjoyed by Google UK.

Further reading

The internet giant does not disclose UK profits. However, if the Telegraph's numbers are correct (they have changed since the initial article was published), 2011 UK profits are likely be around £395m, which would mean a tax rate of around 1.5 per cent.

Google avoids paying corporation tax by diverting its revenues via Ireland and other offshore territories. But even the Irish corporation tax rate (12.5 per cent) is not low enough to satisfy the company, which makes use of loopholes in the law to channel profits to tax havens in Bermuda via subsidiary companies, tactics that in 2010 saw its overseas tax rate reduced to 2.4 per cent in 2010.

Even this paltry rate is higher than that enjoyed by the UK, however.

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