Here’s an exchange from Hansard between George Osborne and Angela Eagle yesterday:
Note, in particular, that George Osborne said of Google that it “paid no tax when the Labour party was in office.”
Here is an extract from the accounts of Google UK Limited, Google’s UK subsidiary, for the year ended 31 December 2007:
You will see that, for the year ending 31 December 2007 there was a total current tax charge of £101,831. Google UK Limited’s deferred tax asset (basically a limited right to reduce your tax bill acquired in past years) does not seem to have absorbed that charge.
All things being equal you would expect that tax charge to be met.
Although Google UK Limited has not provided a cashflow statement it does have a statement of current liabilities which provides:
So Google UK Limited expected, in 2007, to make a payment of corporation tax within a year.
And at a time when the Labour Party was in office.
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Reblogged this on sdbast.
But *did* they? I think it would be useful if HMRC could publish the actual tax paid by companies over a certain size. The amounts they should be paying from an accounting perspective are, after all, public knowledge. And if their tax affairs are in order, they should have nothing to hide when it comes to the actual payments received by HMRC.
I haven’t seen the bank accounts of Google UK Limited and HMRC. But on the evidence no other inference can sensibly be drawn.
Looking at the 2008 Google UK Ltd accounts, it appears that the 2007 UK CT provision was still unpaid as at 31 December 2008 as the liability reflects both the 2007 & 2008 tax charge.
It would seem to have been paid in 2009, as the 2009 balance sheet payable only seems to show the 2009 CT charge which still leaves your point as valid.
I’m not sure quite where you get that from. There’s an amount of corporation tax shown for 2008 in ‘Creditors: amounts falling due within one year’ of £289,558.’ I wouldn’t assume that it incorporates the £148,039 balance in 2007. And in 2009 the equivalent figure is £2,972,695. The more you longer the wronger Osborne gets.
There are some interesting figures in the written evidence HMRC provided to the PAC in February:
“The cumulative current corporation tax over the period 2005 to 2015 shown in Google UK Ltd’s financial statements may be seen as a reasonable (although not precise) proxy for the tax payable over that period. Google UK Ltd’s accounts show a cumulative tax charge in the financial statements from 2005 to 2011 of £11.6 million.”
http://data.parliament.uk/writtenevidence/committeeevidence.svc/evidencedocument/public-accounts-committee/corporate-tax-deals/written/28683.html
But I would not be surprised if there was a hairsplitting defence on the grounds that Osborne referred to “companies that paid no tax”. He did not actually refer to Google, so in his own mind he cannot be wrong.
Thank you Iain. Very helpful.
The tax charge in 2008 was £141,519. Surely the obvious assumption is that the Creditors: amounts falling due within one year’ in 2008 of £289,558 is comprised of the 2007 liability of £148,039 and the 2008 liability of £141,519?
Not really. HMRC tend to like you actually to pay your tax. Especially if it’s, as the Notes provide, due inside a year.
In the context of the tax you have argued Google should have paid (some £200 million for 2014) and the tax that it paid under the settlement with HMRC (£30 million on an annual basis), this looks close to “no” tax to me!
And, as Iain Hamilton has observed, Mr Osborne did not actually say that Google had paid no tax in any case.