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Furious MPs and unions have demanded an investigation after it emerged tax row giant Google had landed a plum deal working for the Revenue.

Calls for an explanation came as thousands of job losses are threatened at the very HMRC offices where Google gear will be rolled out.

More than 100 HMRC offices are due to be replaced with 13 regional bases.

And critics pointed out the deal came as tax staff desperately tried to clamp down on corporate dodgers – and while Google was negotiating to pay £130million in unpaid tax.

Google made an arrangement last summer with HMRC to provide office services such as Google Apps and Google Docs to speed up communication between staff and make the tax-gathering operation more efficient.

(Image: Reuters)

The internet giant’s services will “streamline” tax collection under an existing IT contract between HMRC and data processing firm Capgemini UK.

Details have not been disclosed but the deal is expected to run into millions of pounds.

Read more:£130m Google tax returns blown on HMRC staff bonuses

HMRC’s move will mean some documents are held on the internet company’s offshore servers.

Critics have accused the search engine giant of shifting billions of pounds worth of profit generated in the UK to low-tax Ireland.

HMRC’s own staff vented their anger about close ties with Google amid claims the firm is getting special treatment.

(Image: PA)

The issue was raised on Friday at a meeting in Wrexham, where up to 350 HMRC workers in the city face losing their jobs.

Some staff are being relocated to Cardiff or Liverpool, but the majority will lose their jobs.

Read more: Google should face EU probe over tax deal

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The meeting at Wrexham university was attended by local MP Ian Lucas MP, plus union and HMRC officials.

One ex-civil servant said : “It highlighted just how cosy the HMRC is with Google.

"It’s wrong they paid so little tax and then on the other hand you see they have these government contracts.

(Image: PA)

“The issue was raised to show that HMRC staff face losing their jobs in Wrexham while Google appears to be getting away with not paying a fair amount of tax.”

Labour MP Mr Lucas said: “The Government needs to come clean and be open about its relationship with Google.

"There is great concern about the tax it paid.

"I will be calling for an investigation into the relationship between Google and the Treasury and whether the tax settlement is in any way connected with HMRC cuts.”

It is a further embarrassment for the Government just days after Google’s so-called “sweetheart” deal to pay the backdated £130million in UK tax was mocked as “derisory” by Labour.

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The Commercial and Public Services Union said: “If the Tories keep cutting HMRC’s staff and budgets we’ll never tackle tax evasion. We’ll just see scandal after scandal.

“It would be a gravely serious matter if it turned out HMRC was soft on Google because of its closeness to the company.”

Chancellor George Osborne has pledged to crack down on corporate tax dodging but has been ridiculed for doing too little too late.

Labour MP John Mann said: “There is a huge irony that Google are providing services to HMRC when the Government is reducing precisely the people investigating Google.

"It is hardly surprising the Treasury have come to a cosy relationship with Google. It’s a case of I’ll scratch your back and you scratch mine.”

(Image: Getty)

A spokesman for the HMRC said: “HMRC does not have a contract with Google.

"Licences for Google products are provided through our existing IT contracts.”

It said new software will give “greater flexibility and efficiency, while reducing costs”.

In a statement, it added: “Following a successful pilot, we plan to roll out Google tools to more people.

"We have carefully considered protection of customer information and this remains our priority.”

Google could not comment on the “standard contract”.

Creeping into corridors of power

Google is making inroads into the UK’s corridors of power.

HMRC is the first major department to move its computing to Google Apps services.

The Revenue joined the Cabinet Office and the Department for Culture, Media and Sport in shifting its cloud computing to Google from Microsoft.

The Ministry of Defence is among departments to have held contracts with Google’s subsidiary Motorola UK in the past.

In the US, Google secured millions of pounds worth of contracts with government agencies.

And it has launched a bid for a Pentagon contract worth £1.5billion.