{"id":7458,"date":"2016-01-27T17:07:24","date_gmt":"2016-01-27T17:07:24","guid":{"rendered":"http:\/\/unitelive.org\/?p=7458"},"modified":"2016-01-28T11:37:49","modified_gmt":"2016-01-28T11:37:49","slug":"sweetheart-deal","status":"publish","type":"post","link":"https:\/\/unitelive.test.igniteamt.com\/?p=7458","title":{"rendered":"‘Sweetheart’ deal"},"content":{"rendered":"
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Multinational tech giant Google cut a \u00c2\u0141130m back tax deal with HMRC last week on profits amounting to more than \u00c2\u01416bn over the last decade, a settlement that has outraged the public, tax campaigners and even Conservative ministers.<\/p>\n

 
\nChancellor George Osborne hailed the deal \u00e2\u20ac\u015ba major success\u00e2\u20ac\u0165 at the weekend, but as the public backlash mounted on Monday (January 28), prime minister David Cameron muted his tone, with his spokesman calling it merely \u00e2\u20ac\u015ba step forward.\u00e2\u20ac\u0165<\/p>\n

 
\nThe deal comes against a backdrop of growing public anger over global corporate tax evasion and avoidance. Enormously profitable multinational companies, armed with an army of tax advisors, are able to perfectly legally funnel profits into different countries to dramatically lower their tax bill.<\/p>\n

 <\/p>\n

Disingenous<\/strong><\/em>
\nGoogle, for example, registers its sales in Ireland, where the corporation tax is much lower than in the UK, and then diverts profits to Bermuda.<\/p>\n

 
\nGoogle has avoided paying tax over the last decade in the UK because it says that its sales of advertising space are technically made in Ireland.<\/p>\n

 
\nBut in 2013, a parliamentary committee investigating Google<\/a> and other multinationals\u00e2\u20ac\u2122 tax affairs argued that, while legal, the arrangement is patently disingenuous.<\/p>\n

 
\nGoogle whistle-blowers came out at the time with evidence demonstrating that sales did indeed take place in the UK. One Google UK employee noted that he had received bonuses three to four times his salary for \u00e2\u20ac\u015bselling and closing deals\u00e2\u20ac\u0165.<\/p>\n

 
\nBut head of Google\u00e2\u20ac\u2122s northern European operations Matt Brittin insisted to the parliamentary committee that for tax purposes, contrary to appearances, all sales were made in Ireland.<\/p>\n

 
\n“The UK team are selling, but they are not closing … People here [in the UK] cannot sell what they don’t own,” he said at the time.<\/p>\n

 <\/p>\n

Under similar arrangements, other large multinational companies are able to get away with paying very little in tax in the UK.<\/p>\n

 <\/p>\n

Apple, for example, paid only \u00c2\u014111.8m in tax in 2014, while Amazon paid \u00c2\u014111.9m in tax in the same year, despite registering more than \u00c2\u01415bn of its UK sales in Luxembourg, another noted tax haven.<\/p>\n

 <\/p>\n

Transparency call<\/strong><\/em><\/p>\n

Richard Murphy of Tax Research UK<\/a> calculated that Google\u00e2\u20ac\u2122s tax liability in the UK should be at least \u00c2\u0141200m in 2014 alone. He noted that the paltry \u00c2\u0141130m that Google has been asked to pay in back taxes spanning 10 years meant that the tech giant was being taxed in the UK at effective rate of not more than 5 per cent, and perhaps as little as 3 per cent, while other businesses in the UK must pay corporation tax at 20 per cent.<\/p>\n

 
\nAnother tax expert, Joylon Maugham, calculated nearly identical estimates as Murphy did<\/a>.<\/p>\n

 
\nShadow chancellor John McDonnell wrote to Osborne earlier this week to demand that he release details about how the settlement was reached and whether the chancellor was involved in arranging the deal.<\/p>\n

 
\n“This deal with Google raises a number of important issues about the tax treatment of large companies in the UK,\u00e2\u20ac\u0165 he wrote in his letter. “When times are tough it is more important than ever that everyone pays — and is seen to pay — their fair share.”<\/p>\n

 
\nThe government has said that the backdated tax deal was solely an HMRC decision, after the tax authority conducted a six-year investigation into the tech giant.<\/p>\n

 
\nBut the Mirror revealed today<\/a> that top Tory ministers, including the chancellor, home secretary Theresa May, skills secretary Nick Boles and health secretary Jeremy Hunt, held at least 24 official meetings with Google in the run-up to the deal between January 2014 and September 2015.<\/p>\n

 
\nCriticism of Google\u00e2\u20ac\u2122s tax deal even came from Conservative corners with London mayor Boris Johnson and senior Tory MP David Davis both questioning the settlement.<\/p>\n

 
\nDavis called for transparency of Google\u00e2\u20ac\u2122s finances and tax arrangements, adding that what Google was being made to pay was \u00e2\u20ac\u015ba very small number.\u00e2\u20ac\u0165<\/p>\n

 
\nJohnson noted the settlement was \u00e2\u20ac\u015bderisory\u00e2\u20ac\u0165 and told Sky News, \u00e2\u20ac\u015bWhat everyone wants is a bit of clarity on where their profits are being made and an agreement on how much they should be paying. At the moment what is worrying is that we don\u00e2\u20ac\u2122t really have the transparency about it.\u00e2\u20ac\u0165<\/p>\n

 <\/p>\n

Heart-breaking disparity<\/strong><\/em>
\nOther countries are chasing Google for back taxes with what may be much greater success. The Times revealed today<\/a> that Italy may be forcing Google to hand over \u00c2\u0141130m in backdated taxes, which would amount to an effective tax rate of 15 per cent of its \u00e2\u201a\u00ac1bn in revenues.<\/p>\n

 
\nThe French government is said to be seeking a \u00e2\u201a\u00ac500m deal that will amount to three times what the UK government has asked from Google, despite the company employing thousands more staff and generating significantly more profit in the UK.<\/p>\n

 
\nUnite assistant general secretary Steve Turner condemned the government\u00e2\u20ac\u2122s unwillingness to do anything substantive to combat tax evasion.<\/p>\n

 
\n\u00e2\u20ac\u015bThis week\u00e2\u20ac\u2122s news that Google will pay an effective rate of just 3 per cent over the past decade puts the lie to this government\u00e2\u20ac\u2122s supposed aims to crackdown on tax dodgers,\u00e2\u20ac\u0165 he said. \u00e2\u20ac\u015bThis was a singular opportunity for the government to make good on their pledge to level the tax playing field by making Google stand as an example, but they blew their chance.<\/p>\n

 
\n\u00e2\u20ac\u015bThe deal sets a disastrous precedent,\u00e2\u20ac\u0165 Turner added. \u00e2\u20ac\u015bIf Google, one of the most profitable companies in the entire globe, can get away with paying what for them is mere pocket change, then other corporate giants \u00e2\u20ac\u201c the Facebooks, the Starbucks, the Amazons of the world \u00e2\u20ac\u201c will feel they can follow suit.<\/p>\n

 
\nTurner highlighted the different set of rules that the wealthy and ordinary people must play by.<\/p>\n

 
\n\u00e2\u20ac\u015bWhile ordinary working people must pay tax or be prosecuted, must suffer under the weight of austerity because the government doesn\u00e2\u20ac\u2122t have the nerve to stand up to their mates in the City, profit-flush companies will not have to contribute to the country and its workforce which have helped make them such a success,\u00e2\u20ac\u0165 he said.<\/p>\n

 
\n\u00e2\u20ac\u015bWhat a heart-breaking disparity \u00e2\u20ac\u201c the poorest and most vulnerable are slammed with the Bedroom tax; the wealthiest play games with their tax bill to pay as little as they can get away with and it is called a success by Osborne.\u00e2\u20ac\u0165<\/p>\n

 
\n\u00e2\u20ac\u015bCorporate tax reform does require significant international cooperation but most of all it requires the political will here at home,\u00e2\u20ac\u0165 Turner noted. \u00e2\u20ac\u015bAs tax experts have pointed out, this government can very easily make changes to the tax code to force companies that do business here to pay their fair share. If France and Italy can collect substantially more from corporate giants, then so can we.\u00e2\u20ac\u0165<\/p>\n

 
\nWar on Want has launched a petition to demand greater tax transparency in Europe. Find out more here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Multinational tech giant Google cut a \u00c2\u0141130m back tax deal with HMRC last week on profits amounting to more than \u00c2\u01416bn over the last decade, a settlement that has outraged the public, tax campaigners and even Conservative ministers.   Chancellor George Osborne hailed the deal \u00e2\u20ac\u015ba major success\u00e2\u20ac\u0165 at the weekend, but as the public […]<\/p>\n","protected":false},"author":1,"featured_media":7459,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[17],"tags":[472,237],"wps_subtitle":"Public outcry as HMRC lets Google off the hook","_links":{"self":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/7458"}],"collection":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=7458"}],"version-history":[{"count":1,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/7458\/revisions"}],"predecessor-version":[{"id":7460,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/posts\/7458\/revisions\/7460"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=\/wp\/v2\/media\/7459"}],"wp:attachment":[{"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=7458"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=7458"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/unitelive.test.igniteamt.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=7458"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}