Update: Google Tax Dodging

The office team have had a few questions from members about the figures around the Google tax dodging issue. Yesterday we quoted numbers from the Telegraph suggesting Google were dodging tax on UK profits of £3.95 billion. The Telegraph have since changed that figure to £395 million revenue and added a note to their article:

This story initially cited figures from Google that misplaced a decimal point; the figures for UK turnover are now correctly reported as £395m for 2011 and £239m for 2010.

In relying on these figures, we made the same mistake. As soon as the error was brought to our attention we updated our original blog post and the text on the petition.

Though the numbers have changed, what doesn’t seem to be at issue is the fact that Google, like many other companies, is dodging tax. At various times in the past Amazon, Apple, eBay and Facebook have come in for similar scrutiny.

Some members have been in touch to say we should hold all of these companies to account. Often it’s good to focus on one target at a time (as we did during the Olympic tax-dodging campaign) – but focusing on Google right now won’t mean that there aren’t other opportunities to target other companies up to the same tricks at other times.

A variety of loopholes – including tax havens – allow these companies to avoid paying their fair share at a time when the country is facing deep cuts.

It’s true that there’s more the government could do to tackle tax-dodging. One thing they could do is to bring in a strong anti-avoidance principle. But in the case of Google the advice from tax expert Richard Murphy was that this probably wouldn’t be enough. That’s part of the reason we chose to target Google directly this time.

Many companies face choices about the amount of tax they choose to pay. This was just what Google’s boss, Eric Schmidt said last year: “We could pay more tax but we’d have to do so voluntarily.” Many 38 Degrees members want to keep the pressure on the government to crack down on tax dodging, but that’s not incompatible with occasionally making our feelings known to the companies like Google, who continue to dodge tax. If you support the campaign, please sign the petition here.