Google funnels billions of pounds through Bermuda to avoid tax, a senior figure at the firm admitted yesterday.

In a series of candid comments, Peter Barron also said the company set up its headquarters in Ireland because it had a low level of corporation tax.

And he did not deny the suggestion that the firm amasses its non-US profits in the British overseas territory of Bermuda in the Caribbean to avoid having to pay high rates of corporation tax in America.

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Peter Barron, pictured, said Google has funneled billions of pounds through Bermuda to avoid tax bills

Google’s parent company Alphabet is expected to announce today that it has amassed £30billion of profits from non-US sales in Bermuda. Around a tenth of this – £3billion – will be profits generated in the UK.

The intervention by Mr Barron, Google’s vice president for communications, comes after Chancellor George Osborne was attacked for hailing a UK tax settlement with the US technology firm as a ‘major success’ while critics dismissed it as ‘derisory’.

The firm agreed to pay only £130million in back taxes on an estimated £7.2billion of profits over the past decade.

Sajid Javid, the Business Secretary, yesterday admitted the deal with HMRC ‘wasn’t a glorious moment’ and said he agreed with small businesses who told him there was a sense of ‘injustice’ with the deal.

It also emerged yesterday that the Government had ordered Tory MEPs to vote against a proposed EU crackdown on Bermuda, which has a 0 per cent corporation tax rate. Google has no office and no staff on Bermuda. Its presence is said to amount to little more than a plain PO Box – numbered 666.

Appearing on BBC1’s Andrew Marr Show, Mr Barron said it was difficult to work out exactly how much corporation tax a global firm should pay in the UK.

‘Corporation tax is not on sales or revenues,’ he said. ‘Corporation tax is on profits and identifying what the profit is in the UK is quite a business.’

Asked why Google ‘sends its UK taxes to Ireland’, he replied: ‘When we took the business international in the early 2000s, we then decided to set up our European headquarters in Dublin.’

Google's presence in Bermuda is limited to one post box numbered 666, detailed above

Asked if corporation tax was a reason for this, he said: ‘Absolutely. Governments put tax incentives in place to attract technology companies to their shores – the British Government does, the Dutch government does. It’s a very, very common practice.

‘So when anybody buys advertising from Google in Europe they buy it in Dublin. Now Google UK’s relationship in that is slightly different.

What Google UK does is that we contract our services to the parent company, to Google Inc and to Google Ireland. We are a subsidiary.’

Mr Barron also did not dismiss suggestions that £3billion of the £30billion profits to be announced in Bermuda today would be from the UK.

But he said that the money in Bermuda had already been taxed in Europe, so had no relevance to Google UK’s tax bills.

‘The Bermuda arrangement has absolutely no bearing on the amount of tax that we pay in the UK. No bearing whatsoever,’ he said.

He added: ‘In the UK we pay corporation tax at 20 per cent. There’s no sweetheart deal. It is absolutely the same corporation tax rate as everybody else, 20 per cent on the activities that go on.’

Mr Barron appeared on the Andrew Marr Show to answer question's on the firm's recent tax controversy

On the same programme Mr Javid was asked if he agreed it was unfair that a large corporation such as Google could speak directly with the Government and HMRC about its tax affairs while small and medium businesses did not have that option.

He replied: ‘I speak with thousands of companies, small and medium sized as well as large companies, and there is a sense of injustice with what they see. I share the sort of sense of unfairness that exists.’

It emerged yesterday that Tory MEPs were ordered to vote against EU moves to clamp down on the use of Bermuda as a tax haven.

Treasury ministers told the European Commission they are ‘strongly opposed’ to placing the island on an official blacklist.

A spokesman for Mr Osborne said ministers opposed the plan because they believed such moves should be taken by national governments.

Last night a Google spokesman said: ‘After a six-year audit by the tax authority we are paying the amount of tax that HMRC agrees we should pay.