How Google avoided a British tax bill of £450m



Google avoided paying £450million in corporation tax on its £1.6billion earnings from advertising in Britain last year.

Accounts show the company paid HM Revenue and Customs only £141,519 on other earnings.

Google managed to avoid paying millions here because its European headquarters is in Dublin - and advertising earnings from customers in Britain are funnelled through to the Irish subsidiary.

Finding loopholes: Google pays tax in Ireland for all its UK revenues

Accountants say that if the £1.6billion advertising revenue stayed in Britain, it would be subject to corporation tax at 28-30 per cent rather than the 15 per cent levy in Ireland.

Google's bill would have been up to £450million.

But even the accounts for its Irish operation show a low tax bill. While Google is not accused of any wrongdoing, the tax it paid in 2008 was just £6.7million.

Spokesman Peter Barron said: 'Google makes a big investment in the UK, with more than 800 employees, and we make a substantial contribution to local and national taxation.

'But the fact is that our European headquarters is in Dublin. 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.'