London - A former Google executive on Sunday accused the company of cheating taxpayers out of hundreds of millions of pounds with an “immoral” tax avoidance scheme.
Barney Jones, 34, described how profits on deals completed in the UK were processed in Ireland, where the corporation tax rate is lower.
The whistleblower, who worked for the Silicon Valley giant between 2002 and 2006, is ready to hand over more than 100 000 emails and documents to HM Revenue & Customs, detailing what he claims was a “concocted scheme”.
Mr Jones said: “The real victims are ordinary taxpayers in Britain who are being cheated. Google has pulled the wool over the eyes of HMRC and the British population. Google has prided itself on being a socially responsible company and to pay your tax is the most fundamental responsibility. This is a betrayal of everything that Google stands for.”
Mr Jones has already provided testimony to the Commons public accounts committee about Google, which has the informal motto ‘Don’t be evil’.
His evidence resulted in the heated questioning of Google vice-president Matt Brittin last week, during which committee chairman Margaret Hodge accused his company of doing “evil” and using “smoke and mirrors” to avoid paying tax.
Mr Jones told the Sunday Times that Google’s London sales staff negotiated contracts with British customers, and cash was paid into a UK bank account.
But he said the deals were technically booked through the company’s Irish office, where corporation tax is just 12.5 percent compared to 23 percent in Britain.
Google recorded revenues of £11.9-billion between 2006 and 2011, according to American stock market filings. But by booking its UK sales through Ireland, it paid only about £10-million in corporation tax during the period. Father-of-four Mr Jones said: “To try and fool people into thinking that you are not making money in a country where you are is absolutely scandalous.
“When I was at Google, our job was to find advertisers, to close the deals [and] to get them to sign bits of paper saying they were committing to spend in the UK. If that is not closing the deal, I don’t know what is.
“Google uses a concocted scheme to avoid tax. It’s a smokescreen to distort where the substance of its economic activity is really taking place.” Mr Jones also accused the tax authorities of being ‘asleep at the wheel’ and said they should have challenged Google years ago.
During a two-hour interrogation by the Commons committee last week, Mr Brittin eventually admitted that “a lot of the aspects of selling” took place in the UK, but all sales were processed and billed in Ireland. A spokesperson for Google said: “It is difficult to respond fully to documents we have not seen.
“These questions relate to Google’s business in the UK going back a decade or more and don’t change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.”
David Cameron has written to Britain’s overseas territories calling on them to crack down on tax evasion and aggressive avoidance.
Ahead of next month’s G8 summit, the British prime minister said tackling the issue was a “priority” for the UK at the meeting with world leaders and a “critical moment to get our own houses in order”. He wrote: “Put simply, that means we need to know who really owns and controls each and every company.
“This goes right to the heart of the ambition of Britain’s G8 to knock down the walls of company secrecy [through] properly managed centralised registries, that are freely available to law enforcement and tax collectors.”
In the letter to the leaders of Bermuda, the British Virgin Islands, Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man, Mr Cameron said he respected their low-tax status.
But he warned “lower taxes are only sustainable if what is owed is actually paid”. - Daily Mail