Google's £130m UK tax deal 'seems disproportionately small', MP investigation finds

Google's deal reinforced the Committee's concerns about the rules governing corporation tax

MPs have criticised the £130 million tax settlement agreed by Google and the Government last month (Getty)

MPs have criticised the £130 million tax settlement agreed by Google and the Government last month.

A report by the Public Accounts Committee found that the sum “seems disproportionately small when compared with the size of Google's business in the UK”.

But it could not assess whether or not the figure was enough because of the secrecy surrounding the negotiations, the report said.

Google's tax deal reinforced the Committee's concerns that the rules governing where corporation tax is paid by multinational companies “do not produce a fair outcome”.

“Public anger has been palpable ever since this settlement was announced and we still don’t know the full details,“ Meg Hillier MP, chair of the Committee, said.

”Whether you call it secrecy or confidentiality, this lack of transparency does nothing to build confidence that big corporations are paying their fair share of tax.“

In its recommendations, the Committee called on HM Revenue & Customs to press for changes to international tax rules that would allow the tax affairs of big companies to be open to public scrutiny.

”The bigger prize after a costly six-year investigation would have been to develop a new approach to the activities of internet-based companies,“ Hillier said.

Businesses welcomed the findings of the report. Dr Adam Marshall, executive director of policy and external affairs at the British Chambers of Commerce, said reforms were crucial for restoring trust in the tax system at a time when many businesspeople are angry that the biggest corporations get to play by their own rules.

“We have been calling for co-ordinated international action to stop a small number of companies conducting aggressive avoidance schemes for some time, so we are pleased that the Committee has also urged HMRC to lead the way in pressing for changes,” Marshall said.

The report comes after MPs grilled Google over its tax deal with HM Revenue & Customs that totalled £130 million for the last ten years.

At a Public Accounts Committee meeting on February 11, MPs questioned Google over its tax base in Ireland, its tax arrangements with other countries, and whether it had co-ordinated the timing of the announcement with George Osborne, who heralded the deal as a “great success” at Davos.