Google's UK tax bill: £6m for a year when it made £395m

The tech giant, already under fire for its tax management practices, is set to pay £6m UK tax in a year when its turnover was £395m - a rate of 1.5 percent
Written by Karen Friar, Contributor on

This story has been updated to correct an inaccuracy in the figures initially confirmed by Google.

Google's UK subsidiary will pay £6m in tax for 2011, a year when its revenue was £395m. It's a tally likely to revive criticism over how much the tech giant contributes to the UK's coffers.

The tax bill, revealed in a filing by Google UK to Companies House on Tuesday, works out at around 1.5 percent of its revenue.

Google is set to pay £6m in tax on turnover of £3.95bn in the UK

However, the 2011 payment is a jump in corporation tax for the company: in the six years to 2010, it handed over only £8m in total, according to figures reported by The Telegraph and confirmed by Google. Last year, the bill came to £935,000, against £2.39bn of revenue.

"We comply with all the tax rules in the UK," a Google spokesperson told ZDNet. "We make a big contribution to the UK economy by employing over a thousand people, helping hundreds of thousands of businesses to grow online and investing millions supporting new tech businesses in East London."

Google has come under fire in the past over the amount of tax it pays in Britain. While the UK is one of its largest markets, its European headquarters are located in Ireland, where corporate taxes are low. In addition, Google Europe pays a licensing fee of billions of Euros to its Bermuda subsidiary, which has the effect of lessening its tax burden in the region.

Google's chairman Eric Schmidt himself acknowledged a year ago that the company could make a bigger contribution in the UK.

"We could pay more, but it would be very hard to say to our shareholders 'we feel very sorry for these British people, so we're going to pay millions of dollars in extra taxes that we're not required to do'. There are probably laws against that," Schmidt said at the Edinburgh International Television Festival 2011, according to the Guardian.

In its filing on Tuesday, Google UK reported a loss after tax of £24.1m, after counting an employee share allocation cost of £51.45m. Without that, the subsidiary had a profit of £27m.

In May, it emerged that Google had made a loss in Australia and so paid $74,176 in corporate tax for 2011, down from $1.1m the previous year. Its New Zealand arm also lost money and ended up contributing only $109,000 in tax.

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