The Taxman Finally Catches Up With Google
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After being accused by HMRC (Her Majesty’s Revenues and Customs) of “aggressive tax avoidance”, Google has agreed to pay back £130 million to the British economy.
The agreement came at the end of a six-year tax audit, in which HMRC deduced that Google had been avoiding paying their taxes by setting up their European headquarters in Ireland, where the tax restrictions are much more relaxed.
There has been a lot of criticism about the amount Google has to pay, with some arguing that Google got off lightly. After all, they have generated £5.6 billion in profits in the UK and the £130 million does not seem to be a fair penalty.
However, there are many other companies who set up their Headquarters in these so called “tax havens” like Jersey and Ireland. Starbucks, Fiat and Apple are all companies who have been accused of taking advantage of this tax loophole.
There’s no excuse for tax avoidance, but technically, these companies haven’t actually broken the law. In our opinion, Europe needs to enforce stricter and clearer tax rules to avoid these situations happening again.