Editorial: Google could do itself some good

Until we can tax profits more fairly, the company could make another contribution

Share
Related Topics

There are two possible responses to the payment by several large, profitable, multinational companies of nugatory sums in corporation tax. One is to give up on the idea of a profits tax altogether. There is an economic case for that. It is complex and hard to administer, and it makes more economic sense to tax sales and the income of employees and shareholders. Unfortunately, corporation tax raises £42bn a year in the UK and, as a nation, we need the money. We have, therefore, little choice but to pursue the second option, which is to try to ensure that our taxes on profits are as fair and efficient as possible.

That means being as aggressive and imaginative as – and preferably more aggressive and imaginative than – the tax specialists who work for accountancy firms and the companies they advise. Inevitably, this is a competition at which lower-paid public servants are always going to be at a disadvantage to their rivals in the private sector, but HM Revenue & Customs have one thing in their favour, which is that they are fighting from the higher moral ground.

That is why Margaret Hodge MP, the chair of the Public Accounts Committee and hero of the people, was able to wrap a cable round the legs of Google last week, like a rebel starfighter bringing down an AT-AT walker in The Empire Strikes Back. Too often her committee, like many select committees, indulges in grandstanding and in being rude to witnesses from a position of ignorance. Thanks to a whistle-blower in Google, who was presumably motivated by the public interest, Ms Hodge this time had details about how the company recorded sales apparently made by staff in the UK as being transacted in low-tax Ireland. This arrangement was described by Ms Hodge as "smoke and mirrors to avoid paying tax". No wonder Matt Brittin, head of Google in north Europe, squirmed. No wonder Eric Schmidt, Google's chairman, pulled out of an interview with the BBC this weekend.

If, however, Mr Schmidt keeps his appointment, as a member of the Prime Minister's Business Advisory Group, to see David Cameron tomorrow, we have a suggestion for what he could say. He could say that, having seen The Independent on Sunday's report of the failings of the UK's system for recording and searching for missing people, he had decided that Google should make a contribution to the national good. Data collection and search are, after all, what Google is good at. A company that can now predict what people are looking for before they know themselves is well placed to help build a better national database of missing people. The problem is especially acute for children in care. As we report, the Government has conceded that "improvements can be made in the collection and sharing of information about children who go missing from care".

Google could even, once in a while, use the incredible reach of its front page to raise awareness of the problem and to link to an integrated database.

Ben Chu, our economics editor, has some practical suggestions on page 14 for international agreements to tax profits more fairly, based on the American system of "apportionment". These changes are difficult and will take time. While we wait, it would do Google's corporate reputation no harm if it reinterpreted its motto, "do no evil", not as "pay as little tax as possible" but "do some good".

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Recruitment Genius: Service Manager

£37000 - £40000 per annum: Recruitment Genius: A position has become available...

Recruitment Genius: Administrator

£18000 - £20000 per annum: Recruitment Genius: This company has a track record...

Recruitment Genius: Solar Field Sales Executive

£40000 - £70000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Day In a Page

Read Next
Craig Oliver, David Cameron’s Director of Communications  

i Editor's Letter: Poultry excuses from chicken spin doctors

Oliver Duff Oliver Duff
Women come back from the fields to sell vegetables at a market in Bangui, Central African Republic  

International Women's Day: Africa's women need to believe in themselves and start leading the way

Sylvia Bongo Ondimba
Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable