Google £130m UK Tax Deal 'Small' Say MPs

MPs (BSE: MPSLTD.BO - news) have declared that Google's controversial £130m tax deal with the UK "seems disproportionately small", and called for the taxman to lead a charge for international tax reforms.

The Public Accounts Committee (PAC) said its investigation into the sum - covering a ten-year period - had reinforced its concerns that the rules governing where corporation tax is paid by multinational companies "do not produce a fair outcome".

The deal was hailed as a "victory" by the Chancellor at the time it was announced last month - with George Osborne arguing it could open the door to further agreements with other companies.

However, Labour described the sum as "derisory" given the size of Google's business in the UK.

Meg Hillier MP, the PAC's chair, said: "Public anger has been palpable ever since this settlement was announced and we still don't know the full details.

"Whether you call it secrecy or confidentiality, this lack of transparency does nothing to build confidence that big corporations are paying their fair share of tax.

"Google has been keen to parade its enthusiasm for simplicity in the tax system but the fact remains the company has chosen to set up a complicated tax strategy specifically designed to minimise its tax bill."

She (Munich: SOQ.MU - news) took a top Google executive to task on the issue earlier this month as he gave evidence to the committee's inquiry, accusing Matt Brittin of " living on a different planet to most of our constituents " as he defended the bill.

Mr Brittin confirmed then Google had made profits of £106m on revenues of £1.18bn in the UK over the past 18 months, and said 11% of the company's global sales to customers occurred in the UK.

He said the £130m figure was "the conclusion of a six-year rigorous, independent tax audit in which we are paying tax at 20% like every other UK company".

In its recommendations, the PAC called on HMRC to "lead the way in pressing for changes in international tax rules to prevent aggressive avoidance by multinational companies".

It demanded their tax affairs were open to public scrutiny and the taxman re-open its settlement with Google if new evidence became available from its tax dealings with other countries (Other OTC: UBGXF - news) .