Google executives are to be hauled back in front of the UK’s Public Accounts Committee (PAC) after new claims about the location of its salespeople, which could have tax implications for the internet giant.
It was recently revealed that in 2011 Google paid just £6.09 million, or 1.5 percent, of tax on turnover of £395 million. This led to Matt Brittin, Google’s vice president for Northern and Central Europe, being questioned by the PAC in November last year over how it handled its tax affairs in the UK.
Brittin told the committee that Google doesn’t make sales to UK customers from the UK, but from its Dublin base. However, a Reuters investigation has since revealed that some of its staff and UK customers think it does have people conducting sales in London, which could open up the possibility of having to pay much bigger tax bills.
For example, Google’s own corporate website claims sales teams are based in London and advertises jobs for London-based sales staff, whose duties include ‘negotiating deals’, closing ‘strategic and revenue deals’ and achieving ‘quarterly sales quotas’.
“All of the people you tend to deal with are in London,” Simon Andrews, founder of advertising agency Addictive, told Reuters.
“You would never know about the Dublin thing apart form if you looked closely at the address on the invoices. All the people are based in London.”
Also, approximately 150 London-based employees on LinkedIn said they were involved in formulating sales strategy, managing sales teams, closing deals or other sales work.
Google has firmly denied that Brittin lied to the Committee and said that no selling was being conducted in Britain. However, a spokesman for Google did admit to Reuters that the “wording of some job adverts may have been confusing” and that it is working to make it clearer.
However, Margaret Hodge, head of the PAC, said: “We will need to very quickly call back the Google executives to give them a chance to explain themselves and to ensure that actually what they told us first time around is not being economical with the truth.”
A Google spokesperson told Computerworld UK:
"The Reuters article is wilfully misleading. As we told them in our statement, Matt Brittin clearly explained the roles of UK staff in hours of evidence to the Public Accounts Committee.
‘if [customers] want to buy advertising from us they are encouraged to do so by our people in the UK - they will buy it from our expert team in Dublin’
‘...the people on the ground [in the UK] are helping people make the most of the web and the people in Ireland are helping to operate the systems and sell advertising to the businesses that want to work with us.’
In our written evidence, which we also shared with Reuters, we said: “Google UK Ltd provides sales, marketing and R&D support to Google Inc.”
We have written to the PAC chair Margaret Hodge to explain that Matt Brittin’s evidence was truthful and accurate and that this article paints a very misleading picture.
As we have said many times, we comply with all the tax rules in the UK and in every other country in which we operate.”