Google “cheated” UK taxpayers, says former exec

A former ad sales exec at Google UK has claimed he has a cache of emails proving that the search giant “cheated” British taxpayers of millions of pounds over the last ten years.

Barney Jones, who worked at the firm’s Soho office between 2002 and 2006, said his documents disprove Google’s claims that sales don’t take place at its London offices.

The firm has justified its low UK corporate tax bill by saying that staff at its Ireland office were largely responsible for closing deals.

But Jones told The Sunday Times that this wasn’t the case, showing the newspaper contracts signed by Google’s London sales staff and British customers.

“[Google] uses a concocted scheme to avoid tax. It’s a smokescreen to distort where the substance of its economic activity is really taking place,” said Jones.

“The real victims are ordinary taxpayers in Britain who are being cheated by Google,” Jones added. “They don’t have the means to hire accountants to pretend they make their money in Ireland, Bermuda or the British Virgin Islands. What Google is doing is immoral.”

Responding to Jones’ allegations, Google insisted that it complies with UK law.

“As we said in front of the Public Accounts Committee, it is difficult to respond fully to documents we have not seen,” a spokesperson told PC Pro. “These questions relate to Google’s business in the UK going back a decade or more and don’t change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.”

Google has tried to downplay the importance of its British employees in its UK operations in order to reduce its corporation tax bill. The firm faced its second grilling from MPs over its tax arrangements after Reuters highlighted inconsistencies in how Google presents its activities in the UK. While UK chief Matt Brittin told the public accounts committee Google doesn’t make sales to British customers from the UK, the report found some of its staff and UK customers believe it does.

Schmidt calls for reform

Google chairman Eric Schmidt has attempted to shift the debate away from “accusation”, conceding that legislation that allowed for tax loopholes could do with “reform”.

“Given the intensity of the debate, not just in the UK but also in America and elsewhere, international tax law could almost certainly benefit from reform,” he told The Observer yesterday.

But Schmidt continued to defend his firm’s activities, sticking to the line that the firm’s most important staff are based in the US, despite job ads suggesting otherwise.

“Most of Google’s engineers are based in the US and that’s where much of our product development takes place,” he said. He also warned that stricter rules could also stymie job creation and growth, and noted that politicians “devised the rules”.