Osborne hails Google tax deal as “major success”

George Osborne has hailed the UK’s £130m tax deal with Google as a “major success” and is claiming political credit for a tax penalty he introduced.



But the opposition Labour party called the agreement a “sweetheart deal” involving relatively trivial sums, and asked for greater transparency on the details.

The deal comes after HMRC, Britain’s revenue service, spent several years investigating whether the tech group had skirted its tax bill by allocating profits to its European base in Ireland. The agreement covers underpayment of tax over a decade in the UK, its biggest market outside the US.

Mr Osborne, who is at the World Economic Forum in Davos, tweeted that the Google tax bill is “a victory for the action we’ve taken. I introduced Diverted Profits Tax.We now expect to see other firms pay their share”.

Google paid only £20.5m in tax in 2013 based on attributed UK profits despite raising $5.6bn in UK revenues. Unde ther new agreement, it would pay £130m in back taxes and higher taxes in future.

But Google was not found to have been evading tax by the HMRC, and it has not been fined. It also avoided any penalty for tax diversion under the so-called “Google tax” regime that Mr Osborne introduced.

John McDonnell, finance spokesman for the opposition Labour party, said the amounts involved in the settlement were “relatively trivial in comparison with what should have been made” and that some independent analysts have argued that the amount should be at least ten times larger.

“This looks like another sweetheart deal,” he told BBC Radio on Saturday.

Meg Hillier, a Labour MP who chairs the public accounts committtee, called on Google and HMRC to explain the details of the deal.

“Bet individual taxpayers wouldn’t get off as lightly as Google on back tax,” she tweeted.