UK government defends Google tax settlement

UK government ministers are facing criticism over the tax settlement reached with search engine giant Google last week after reports emerged the company could pay almost three times the amount to authorities in France.

John McDonnell, Labour’s finance spokesperson, wrote to George Osborne, chancellor of the exchequer, asking if he personally signed off on the tax settlement as a row over the deal intensified.

McDonnell said questions remain unanswered over Google parent Alphabet’s agreement to pay £130m (€171.9 m) in tax, an amount Labour called “derisory”.

His letter, sent yesterday, also asked if any members of Osborne’s private office met with Google or UK tax authorities before the arrangement was made public last week.

“This deal with Google raises a number of important issues about the tax treatment of large companies in the UK,” McDonnell said in the letter, which he chose to make public.

“When times are tough it is more important than ever that everyone pays — and is seen to pay — their fair share.”

Osborne’s financial secretary David Gauke defended the government’s position in an unscheduled parliamentary debate on Monday and denied the UK is giving Google and other multinationals special treatment.

The debate, which was called by Labour, failed to answer lawmakers’ doubts over the deal, McDonnell said.

Further questions were yesterday prompted by reports in the Times of London that France is seeking a much larger tax payment from Google.

The report claimed that French officials “have aggressively pursued the company for more than €500m”.

Cameron’s office rejected suggestions the settlement was too small. Spokesman Christian Cubitt told reporters the prime minister and the chancellor were “of the same mind on this”.

The tax agency “is satisfied,” he said.

“The settlement they have got in this particular case is an acceptable one” in light of their litigation and settlement strategy.

The agreement also drew criticism from within Osborne’s Conservative Party.

London mayor Boris Johnson said it was “absurd” to attack Google over the settlement because “you might as well blame a shark for eating seals”.

Johnson instead criticised the government for not extracting enough money, saying, in an article for The Telegraph on Monday, that “the fault in the whole affair lies with our national arrangements — our own system for not getting a fair whack from the tech giants”.

Bloomberg with additional reporting by Irish Examiner staff