Google 'devious over tax bill'

Google was branded "devious," "calculating" and "unethical," as furious MPs stepped up pressure on the internet giant over its efforts to shelter its multi-billion profits from UK taxes.

MPs from the Public Accounts Committee quizzed the company's UK boss Matt Brittin as to why he has sales staff in the UK while registering profits from sales deals in Ireland - where tax is 10 percent lower.

ITV News Business Editor Laura Kuenssberg reports:

Read: Laura Kuenssberg's blog: 'Call a spade a spade' - Google under attack

Labour leader Ed Miliband has tweeted that Google's failure to pay tax shows a culture of "corporate irresponsibility" which is "totally unacceptable".

Business Secretary Vince Cable has told Channel 5 News that public outrage at Google and Amazon over tax is “absolutely justified”.

Cable said: "Particularly if you are a small company which can’t relocate overseas and has to pay a lot of tax, I can understand why people are absolutely furious and they’re looking for us in government, quite rightly, to close any loopholes."

He added: “Google, Amazon and some of these other companies are not actually acting illegally, they’re not engaged in illegal tax evasion, but what they are doing is using every opportunity they get to avoid paying tax, so there is an issue about ethical behaviour.”

Robert Oxley, Campaign Manager at the TaxPayers' Alliance has told ITV News that politicians "should be reforming the system instead of moralising about tax."

Margaret Hodge MP has told BBC Radio 4's World At One that "there is enough evidence by whistleblowers to suggest that sales activity is taking place at Google."

She added: "My feel is that Google are certainly masquerading as a marketing business here in the UK, where in fact they are a sales business.

"HMRC, if I may say so, are really dealing with them in a pussycat way, rather than what I would like to see - that they are the bulldogs working on behalf of you and I and everybody else as taxpayers.

"In my view they (Google) are undertaking sales activity here in the UK.

"They say they are not. I believe that they are, and we had evidence of payslips from UK-based staff where three-quarters of the money earned by individuals comes from commission. Commission only comes from sales."

Ms Hodge added: "We had evidence from all the people who do business with Google, lots of the ad agencies.

"They all think they are cutting deals with Google here in the UK. If everybody thinks that but Google, and perhaps the HMRC, shouldn't common sense prevail?"

Coffee chain Starbucks has today admitted that they have not yet paid any of the millions pounds they promised they would pay to the government after a row over their tax before Christmas.

MPs earlier accused Google UK boss Matt Brittin of "devious, calculated and unethical behaviour in deliberately manipulating the reality of the tech giant's business."

ITV News Political Correspondent Libby Wiener reports:

Read more: 'Why don't you call a spade a spade?' Google under attack

Read more: Starbucks have not yet paid money pledged after tax row

Committee chairman Margaret Hodge has criticised HM Revenue and Customs chief executive Lin Homer over the way her staff interpreted the law in relation to companies like Google.

"It is an issue of judgment," she said. "I think your judgment belies common sense. We don't trust your judgment.

"I think your staff are being bamboozled."

Ms Homer, who was appearing after Mr Brittin, insisted that HMRC was better qualified than MPs to determine what taxes were due.

"That is a matter for the application of expert tax knowledge. I'm afraid that that is something I think we do rather better than a select committee," she said.

She added: "Unless and until you change the law, we cannot collect the tax people would like us to collect."

Committee chairman Margaret Hodge has accused Google UK boss Matt Brittin of "devious, calculated and, in my view, unethical behaviour in deliberately manipulating the reality of your business in order to avoid paying your fair share of tax to the common good".

She added: You are a company that says you do no evil and I think that you do do evil in that you use smoke and mirrors to avoid paying tax."

Mr Brittin said: "We comply fully with the laws that are set down by politicians. Tax is not a matter of choice, tax is a matter of following the law."