Only days after breaking the $900 share price mark Google are now facing problems once again in the UK as government ministers challenge the internet giants over how they have been declaring their income in the country for tax purposes.
According to a report by the BBC the chair of the Public Accounts Committee, Margaret Hodge, Google have sold advertising in the UK and then invoiced these customers in the UK which would make them liable for tax in the UK also.
Previously Google had claimed that they had no need to pay taxes in the UK because all the invoices for UK customers were paid into Ireland where the same tax laws do not apply.
Now it is being said by government ministers that whistleblowers have told them that Google have actually invoiced customers in the UK and this could change the entire standing of Google in the UK.
Matt Brittin, the head of sales in Northern Europe for Google, siad: “No one in the UK can execute transactions.”
He added: “No money changes hands.” Although Google do employ staff in the UK for sales purposes.
Margaret Hodge said: “It was quite clear from all that documentation that the entire trading process and sales process took place in the UK.”
It was at this point that Google were then warned that giving false evidence can be considered to be in contempt of the house which would mean that anyone found to not be telling the truth from Google in this case could face legal problems.
Google continue to maintain that sales in the UK are worth around €3.2 billion, however because most of these sales go through Ireland they do not need to pay high levels of corporation taxes.
In 2011 Google paid only €6 million in corporation tax which has been slammed by the UK government and also by the public in the UK who feel that Google are unfairly taking advantage of the tax system to avoid contributing to the economy at large.
The UK has seen high levels of unemployment and austerity measures to help bring the country out of recession and big companies such as Google who are making massive profits in the country without giving their fair share are not in favour with the government or the public.
Brittin said that Google did not need to pay any more tax in the UK because their business was through Ireland where in Dublin around 3,000 staff are employed.
“When we came to Europe, we set up Dublin as our European headquarters.
“We wanted to be able to contract with customers across the whole of Europe, not just the UK.”
He concluded: “Any customer that spends with us, they have to buy from Ireland, because that’s where the intellectual property sits.”
The case is not likely to die down anytime soon and Margaret Hodge concluded: “We will continue to have whistleblowers until we get to the bottom of the truth about all this.”