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Google Head Defends UK Tax Arrangements

By Amanda Banks,, London

24 April 2013

In an interview with the BBC, Google executive chairman Eric Schmidt has defended the company against criticisms that it pays too little tax in the UK.

Challenged on the company's corporation tax bill of just GBP6m in 2011, Schmidt, who also sits on the UK government's Business Advisory Group, emphasized the extent of the company's investment in the UK. He explained that Google employs more than 2,000 people in the UK and he argued that the company empowers "literally billions of pounds of start-ups through our advertising network and so forth, and we're a key part of the electronic commerce expansion of Britain, which is driving a lot of economic growth for the country." Schmidt also drew attention to Google's support for initiatives such as the Raspberry Pi, a very cheap computer for children.

Schmidt argued that "the fact of the matter is these are the way taxes are done globally. The same is true for British firms operating in the US, for example." He added that Google's tax arrangements "fully comply with the law," and the economic growth which Google enables "is by far the best answer to all of these questions, in my view."

The BBC also asked for a response from Margaret Hodge MP, who is Chair of Parliament's Public Accounts Committee and a member of the opposition Labour Party. Hodge said that she was "fed up" with hearing about how global companies contribute in other ways. She complained that companies should "not get away" with not paying one tax just because they pay others, and she argued that Google should pay more as it depends on the education system for its employees. She added that she did not believe that Google would be driven away by higher taxation, given the profitability of the company's business.

She also suggested that Schmidt ought not to remain a member of the Business Advisory Group, which provides advice to the Prime Minister in person and to senior ministers on business and economic issues facing the UK.

TAGS: tax | tax avoidance | commerce | corporation tax | United Kingdom | internet | e-commerce | corporate responsibility

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