Google slides down brand rankings as tax row takes its toll

Search giant, named as fifth-most desirable brand in 2012, drops 109 places as consumers start to wonder whether it can be evil after all

Google's motto is "don't be evil", but news of the multi-billion pound internet behemoth's tax affairs seems to have left consumers less than convinced.

According to a survey of 12,000 consumers by Clear, the brand agency of M&C Saatchi, Google has slumped an astonishing 109 places - from fifth to 114 - or, as the agency puts it, a 38 per cent drop in desirability.

The search giant has been at the centre of a damaging row over its tax arrangements.

Earlier this year, the parliamentary Public Accounts Committee (PAC) called on HM Revenue & Customs to investigate the company, after deciding  it had used "highly contrived" tax arrangements with the sole purpose of avoiding corporation tax on its massive UK revenues.

The company's representatives were twice called to Parliament to be grilled over what MPs described as a a brazen and unconvincing attempt to avoid paying its fair share of UK tax.

Matt Brittin, the vice president of Google’s operations in northern Europe, said that the small UK tax bill was justified because its British subsidiary does not carry out transactions. From 2006 to 2011, the company generated £11.9bn in revenues in Britain but paid just £10.5m in taxes.

The firm claimed that it legitimately channelled its business through its Dublin office, where corporation tax is 12.5 per cent, compared with Britain's 21 per cent.

Despite being castigated by the MPs, Google's executive chairman Eric Schmidt was unrepentant.

"If the British system changes the tax laws then we will comply," he said last month. "That is a political decision for the democracy that is the UK."

James Osmond, Clear's chief executive, said the reason for Google's fall was not simply about taxes, it was that it had been damaged by its participation in the US' NSA Prism information gathering scandal, as well as Google Street View collecting unauthorised data.

"Google has a great, inspiring purpose," said Mr Osmond. "But if it doesn't back up what it stands for, it can fall far and fast.

"It's not just about tax, it's also security. When several of these things happen together, it can have a massive impact on how a brand is perceived."

Of the other brands in the ranking, Apple - which has also had its share of tax travails - takes the number one spot, with its iPhone brand at number two. The online retailer Amazon, which again has been accused of avoiding tax, is at number seven.