Google finds itself under further government pressure

Posted by Nick Farrell

British Parliament appears to be a little concerned that the search engine Google might not have been telling the whole truth the last time it showed up.

The tech giant told the Public Accounts Committee (PAC) that it made sales to UK customers from offices based in the Dublin so that it did not have to pay much tax in the UK.

At the November hearing, Google's European chief Matt Brittin told the committee that nobody in the UK sold anything, adding that the company employs "a couple of hundred" staff at its Europe headquarters in Dublin, who oversee sales to the UK.

However, the outfit was discovered by Reuters journalists to have hired sales staff in London. Descriptions of jobs within the company, such as a role as sales search lead for Google subsidiary DoubleClick, outline responsibilities including "meeting or exceeding aggressive quarterly and annual sales targets". Job postings which include "closing strategic and revenue deals" and reaching "quarterly sales quotas" in their description were also uncovered.

Director for external relations Peter Barron said Matt Brittin denied lying to the PAC. He pointed out that Google did comply with all the tax rules in the UK. But it did admit that the wording of some job adverts may have been confusing.

His excuse was that staff in the UK were there to market the company as an advertising channel rather than to finalize any deals with customers.

But Simon Andrews, founder of ad agency Addictive, which arranges advertisement campaigns for clients, told the International Business Times  that his company always works with Google employees based in London.

In fact, it appears that Google is a Dublin based operation only when it comes to the invoice.

Needless to say, parliament is not happy that Google might have been economical with the truth and wants to clear the matter up.

Margaret Hodge, head of the PAC, said that it was about time the committee looked at Google's accounting practices again.

She said that the committee will call back the Google executives to give them a chance to explain themselves and to ensure that what they said the first time around is not being economical with the truth.

Google's accountants Ernst & Young will also be quizzed again. This is because John Dixon, head of tax policy at the auditor, told the committee that his staff toured its client offices to ensure they were complying with UK tax laws.

Hodge said Dixon's evidence had been clear and unambiguous. Now Ernst & Young have questions to answer about whether they were being completely open with the committee.