Thursday, September 23News For London

Corbyn clashes with Cameron over Google tax deal

Photo by Danny Marten using google.comPhoto by Danny Marten using google.com

Following talks with government ministers, Google agreed to pay HM Revenue and Customs (HMRC) a sum of £130m; a sum that has been criticised as being far too low.

Tax Campaigner and blogger Richard Murphy was quoted as saying: “It would be entirely reasonable to expect a corporate tax rate of at least £200 million should have been due in 2014.”

However, Google has agreed to pay HMRC £130 million for the previous ten years; they may be paying as little as 5% corporation tax (tax on profit) rather than the 20% insisted on by UK law.

 

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This led Jeremy Corbyn to challenge David Cameron over the deal during Prime Minister’s Questions. Corbyn addressed the Prime Minister: “I’ve had an e-mail from Jeff. He wants to know, as a working man of over 30 years, is there a scheme he can join to reduce his tax rate to 5%?”

The Prime Minister hit back angrily, saying: “Tell Jeff that under this government, his taxes are going down and Google’s taxes are going up.”

He continued: “Under Labour, Google were taxed at 0% whilst the Conservative government stopped £100bn in tax avoidance by banning suspect accounting practices that were allowed under Labour. If you want to talk about tax call Tony Blair at Morgan Stanley and Gordon Brown at California Investment firm Pimco, who allowed this tax avoidance.”

However, Cameron’s robust defence has been challenged by French MEP Eva Joy, who told BBC Radio 4 that the “settlement was bad news for everybody”.

Joy, also the Chairman of the EU Tax Committee said the UK was “becoming a kind of tax haven to attract multinationals”.

She was not alone in criticising the tax deal. Conservative Treasury Select Committee member Mark Garneir MP said: “The Google tax agreement represents a relatively small amount of money compared with Googles UK profits”.

 

Edited by Pete Adams