Wikipedia founder backs Autumn Statement 'Google tax' crackdown on multinationals

The founder of Wikipedia has welcomed George Osborne’s decision to impose a “Google tax” and said offshore avoidance by multinational companies is “a real problem and it has to be fixed”.

Jimmy Wales told The Independent: “If domestic UK companies are put at a disadvantage because global companies don’t pay taxes, that’s not a good thing.”

However, Mr Wales, an influential figure in the internet industry, said the onus was on governments to change the law, rather than just to criticise multi-nationals such as Google, Amazon and Starbucks.

“When people are beating up on Google, for example, for how little tax they pay, as long as they’re following the law, it’s difficult to blame them,” said Mr Wales. “But if companies are able to shift earnings around, so they don’t pay tax, it’s a real problem and it has to be fixed. I would support steps in that direction.” Mr Osborne’s plan for a 25 per cent Diverted Profits Tax was announced in the Autumn Statement.

Mr Wales was speaking as he helped to float new mobile network The People’s Operator, with a £100m valuation, on the London Stock Exchange.

The People’s Operator, which he has backed, gives 10 per cent of each customer’s phone bill to charity — money that it can afford to give away because it does not spend on advertising and instead relies on social media for recommendations.

He described the business model as “cause-based” commerce: “You cut out that marketing cost and do something that the customers care about — and that becomes your marketing.” Other companies “can be at great risk if people feel they are doing wrong,” he added. “We're a UK company that pays UK tax.”

The People’s Operator uses mobile network EE as its provider.