Thursday, May 13News For London

Boris Johnson defends Google

Google is due to pay £130m extra in a decade’s worth of back taxes to the UK. The Mayor of London, however, defended Google in his column for the Daily Telegraph on Monday.

By Robert Scoble (Flickr, creative commons)
By Robert Scoble (Flickr, creative commons)

Johnson claimed that it is the manager’s job to pay as little tax as possible within the law.

He wrote: “It is absurd to blame the company for ‘not paying their taxes’. You might as well blame a shark for eating seals. It is the nature of the beast; and not only is it the nature of the beast – it is the law it is the fiduciary duty of their finance directors to minimize tax exposure.”

The Mayor of London further explained that the companies have legal obligations to their shareholders, not to public opinion or to politicians.

Boris Johnson is a known advocate of the tech sector. He recently launched a campaign in support of the gaming industry in the UK.

His opinion is widely different from the majority of politicians and industry experts, most of whom wanted Google to pay more taxes. Some of them only questioned whether it was enough to get £130m on estimated UK profits of £7.2bn. George Osborne, for instance, has called it a “major success” and expects other companies to follow Google and pay their fair share. The Conservative MP Mark Garnier, a member of the Treasury select committee, said the agreement represented a relatively small amount of money, The Guardian reported.

This payment covers money owed since 2005, the year when Her Majesty’s Revenue and Customs submitted an inquiry. It was claimed ten years ago that the internet giant was not paying enough taxes. It paid an annual rate of corporation tax of just 2.77%  of their profits, while most British businesses usually pay corporation tax of 20%.

Edited by Sara Macham.