Google’s revenue tops £1.6bn and pays just £44m in corporation tax

According to its filing with Companies House, Google UK Ltd recorded revenue of £1.6 billion for the year to June 30, 2019, up £193 million from the previous year. .

The corporation tax payment of £44.3m was lower than the £65.6m paid by Google UK a year earlier, and meant the company was paying the ‘equivalent’ of 2 .73% of its income in corporation tax, before losses and offsets are reflected on the balance sheet.

Operating profit was valued at £225.8 million, compared to £245.5 million the previous year. After-tax profits were £182m, flat on the previous year’s total of £181m.

Administrative expenses increased by £213 million to £1.37 billion, mainly due to an increase in staff, which reached 4,439 from 3,658 the previous year.

The company also noted that it had also expanded its R&D activities, spending £462 million to “provide research and development services to a related party during the year”.

Accounts show Google UK paid £1.039 billion in staff salaries and bonuses. The average salary before bonus of £234,000.

Google’s UK operation is primarily used as the marketing and sales arm of its European operation, which is headquartered in lower-tax Dublin.

Google’s tax strategy has come under increasing criticism from MPs and campaigners.

Paul Monaghan, Managing Director of Fair Tax Mark, said: “Once again it looks like Google is writing its own rules in the UK. Revenues are up but corporate tax charges are down. That’s before we get to the puzzle of how they continue to get away with reserving so little of their UK advertising revenue through their UK subsidiary.

Last April, HMRC published details of the Digital Services Tax (DST), a 2% tax on income from UK users of social media platforms, search engines and online marketplaces, which applies to income generated from April 1, 2020.

Any company that provides a social media platform, search engine or online marketplace to UK users will need to register to pay if they have worldwide revenues of over £500m a year and UK revenues over £25 million a year.

DST applies at the group level. The revenues of all businesses in a group will contribute to these thresholds.

Under the scheme, Google would see 2% of its £1.6bn UK sales taxed, bringing in an additional £32m.

A Google spokeswoman said: “We pay over 80% of our corporate tax in the United States, which is our home country. We also pay all taxes due in the UK. We strongly support the work of the OECD to develop a new international framework on how multinational companies are taxed.

Report by Pat Sweet