MPs hit out at Google’s £130m tax settlement

GEORGE Osborne faced mounting anger last night over a so-called sweetheart deal with Google that allowed it to pay only £130million in taxes dating back a decade.

A Treasury minister is expected to be hauled before the Commons today to explain the settlement in an urgent question.

After the US internet giant said it would pay taxes going back to 2005, the Chancellor hailed it a ‘victory’ for the Government.

But the amount was branded ‘derisory’ in light of the fact that the firm racked up sales of £4.5billion in Britain in 2014 alone.

In fact, it does not even cover one day of Government borrowing. The Government borrowed £214million a day in 2015 as the state spent far more than it raised in tax.

Shadow chancellor John McDonnell yesterday said there may need to be a public inquiry into tax deals between HM Revenue & Customs and multinational firms.

HMRC is said to be looking to secure tens of millions of pounds in back taxes from firms such as Facebook, Microsoft and Amazon.

It is thought that several US technology giants are close to striking deals with the taxman in the wake of the Google settlement.

But any agreements are likely to spark accusations that they are still not paying their fair share.

Mr McDonnell said: ‘The suspicion that the Government is planning to announce similar deals in the near future means that a public inquiry may now be urgently needed to look at the whole approach.’

He added: ‘I am going to request that George Osborne give an explanation to the House of Commons.’

Mr McDonnell has already called on the National Audit Office to investigate the deal with Google.

There could also be a series of parliamentary inquiries into the arrangement.

Labour MP Meg Hillier, who chairs the Public Accounts Committee, labelled the agreement a ‘cosy deal’ and said she would call Google and HMRC before the committee.

Fellow Labour MP Wes Streeting raised the prospect of a further inquiry by the Treasury Select Committee, of which he is a member.

‘Unfortunately George Osborne seems to be the only person outside of HMRC and Google who thinks this is a good deal for UK taxpayers,’ he said.

Branding the £130million a ‘paltry sum’ and ‘peanuts for Google’, he added: ‘We should haul HMRC and Google in front of the Treasury Committee to explain themselves.’

Conservative MP Mark Garnier, who sits on the Treasury Select Committee, also criticised the deal.

‘They are turning over billions a year and still paying relatively small amounts of tax,’ he said.

But Mr Osborne hit back and said it was ‘a bit rich’ of Labour MPs to criticise the Government, given the deal secured tax related to profits made when Labour was in power.

London mayor Boris Johnson said the tax paid in the past by technology firms like Google and Apple had been ‘derisory sums’.

However, writing in the Telegraph, he said blaming businesses for taking of advantage of tax loopholes is ‘absurd’. He added: ‘After years of Labour inertia, George Osborne has made progress. The Google payback is a start. We now need to go further.’

Google said: ‘The way multinational companies are taxed has been debated for many years and the international tax system is changing as a result.

‘This settlement reflects that shift and is in line with recent OECD guidance.’