GOOGLE, the internet search giant, avoided UK tax of around £450m last year by diverting its substantial advertising earnings from customers in Britain to its Irish subsidiary.
The Californian technology company used a legal arrangement to route £1.6bn UK advertising revenues via Dublin. Google paid £141,500 in UK tax for the 12 months, which constituted interest generated by its cash pile in bank deposits.
The news prompted outcry from politicians, who accused the firm of shirking its social responsibility.
Vince Cable, the Liberal Democrat shadow Chancellor, said: “Avoidance like this is hard to stomach at the best of times. But when the country is in recession and everyone is feeling the pain, it really sticks in the throat – it means higher taxes for the rest of us.”
A spokesman for Google said: “We comply fully with the tax laws in all the countries in which we operate. It would be wrong to think of Google’s revenues from UK advertisers as solely the result of operations carried out locally. We invest in R&D, data centres and other infrastructure on a global basis, and that then helps generate revenue in various countries.”