Reply to: Google set to pay £380m in France despite UK being its largest base

[AtW]

[greenlake]

French investigators avoided the Internet, stuck to word processors and renamed Google ‘Tulip’ to prevent leaks as they prepared a secret tax raid at the company’s Paris offices last week.

'Operation Tulip' Takes Prosecutors Offline for Google Tax Raid - Bloomberg

[SlipTheJab]

It's reasonably to assume they pay full PAYE in those cases, so that's good, that was never an issue - the issue was corp tax which they paid pityful amounts by shifting sales to Ireland.

PAYE is not a tax paid by a company but levied on an individual, its merely the companies role to pass it on (or not as the case may be with several notables companies, mainly football related!)

[AtW]

If you look up the accounts for Google UK, the employment costs were £289m for 1835 employees, this included share bonuses of £67m - but the average comes to £157K each. The accounts are quite old, December 2013 so things will have moved on since then.

It's reasonably to assume they pay full PAYE in those cases, so that's good, that was never an issue - the issue was corp tax which they paid pityful amounts by shifting sales to Ireland.

[AtW]

This is an odd one though. The U.K. VAT rate is 20%, in Ireland it's 23%. So are UK customers paying 23% VAT? Or are Google only returning 20% to the Irish Revenue?

They were paying whatever Ireland's VAT rate was, UK was totally missing out. UK VAT registered companies could avoid (legally) paying VAT by giving their VAT number.

However from 1 Jan 2015 VAT regs changed big time for electronic services - place of supply is now where the customer is, so EU companies have to charge VAT rate of the country where customer is (within EU), keep track of changes in VAT rates and also repayment of such VAT will go to respective countries, so VAT dodge would no longer work, but the main reason Google (and many others) used Ireland was not for VAT purposes but to gain corp tax advantage, ironically they did not even pay Ireland's 12.5% corp tax - using another trick to take money out, so even Ireland was fooked over!

[Waldorf]

This is an odd one though. The U.K. VAT rate is 20%, in Ireland it's 23%. So are UK customers paying 23% VAT? Or are Google only returning 20% to the Irish Revenue?

Edit: found it http://www.nortonaccountancy.co.uk/g...oogle-adwords/

It would appear from your link that NO VAT is paid (provided the client is VAT registered). I suppose that is the same for most transactions anyway, it's just a long way to achieve the same thing. Hopefully we can change this if we Vote Leave !

[meridian]

Google set to pay £380m in France despite UK being its largest base

The point on VAT was that Google put all sales via Ireland, so VAT (for businesses that were not VAT registered) was sent to Ireland and UK did not collect it - I don't know how much, but it would be substantial amount given massive sales: £1 bln sales, 20% VAT, if 10% of customers by value don't have VAT registration then £20 mln per year lost.

This is an odd one though. The U.K. VAT rate is 20%, in Ireland it's 23%. So are UK customers paying 23% VAT? Or are Google only returning 20% to the Irish Revenue?

Edit: found it http://www.nortonaccountancy.co.uk/g...oogle-adwords/

[Waldorf]

The staff aren't paid an average of £160k each. Google isn't a good payer as they don't need to be as they can rely on the name. They do give their staff loads of perks though.

If you look up the accounts for Google UK, the employment costs were £289m for 1835 employees, this included share bonuses of £67m - but the average comes to £157K each. The accounts are quite old, December 2013 so things will have moved on since then.

[AtW]

The staff aren't paid an average of £160k each. Google isn't a good payer as they don't need to be as they can rely on the name. They do give their staff loads of perks though.

£160k average sounds like a total BS figure to me.

[SueEllen]

The staff aren't paid an average of £160k each. Google isn't a good payer as they don't need to be as they can rely on the name. They do give their staff loads of perks though.

[AtW]

For example they've spent £650M on a new building which can house 4.5k staff.

That's not tax deductable.

Also, I am pretty sure that it wasn't Google (UK) that bought it - most likely the cash comes from Bermuda or some other place where it got laundered from taxes.

Apparently there are 2000 UK staff paid an avearge of £160k each ( Google UK staff earned average wage of £160,000 each in 2015 | Technology | The Guardian

Yes, that's tax deductable: £1 bln gross profit, less alleged (I find it hard to believe personally) £320 mln staff costs - tax due on £680 mln - there was never a problem of employment costs reducing taxable base, the issue was that they paid literally fook all for a decade.

If Google spent all income from UK on salaries taxed at 45%+NICs then it would be even better for taxpayer than having issue over non-payment of 20% tax.

[AtW]

Not sure of your point on the VAT - the fact that a small, not VAT registered business cannot reclaim the VAT isn't the fault of Google, this is the case with any company.

The point on VAT was that Google put all sales via Ireland, so VAT (for businesses that were not VAT registered) was sent to Ireland and UK did not collect it - I don't know how much, but it would be substantial amount given massive sales: £1 bln sales, 20% VAT, if 10% of customers by value don't have VAT registration then £20 mln per year lost.

[tomtomagain]

If the UK is the largest base for Google then they'll have more costs here which they can offset against tax.

For example they've spent £650M on a new building which can house 4.5k staff. ( Link )

Apparently there are 2000 UK staff paid an avearge of £160k each ( Google UK staff earned average wage of £160,000 each in 2015 | Technology | The Guardian

I have tried to find out what sort of presence Google has in France but I cannot find anything to say that they have anyone at all. I assume there must be some French staff, but maybe not?

So it is probable that they can have a lower tax-take in the UK when compared to France BECAUSE they are investing in the UK and not in France.

Makes sense?

* * * They still pay too little though!

[Waldorf]

Google set to pay £380m in France despite UK being its largest base

Not sure exactly what period £380 mln convers, but I reckon correct annual tax figure in France should have been £200-300 mln, given that their corp tax is 33%. UK should be at least £200 mln plus VAT (at least some of it is not recoverable by small firms).

I agree that the tax from Google should be a lot more, part of the issue is that they book the sales in Ireland and so with little 'sales' in the UK and high overheads then the 'profit' is smaller than expected. Clearly this is a sham and needs to be addressed.

Not sure of your point on the VAT - the fact that a small, not VAT registered business cannot reclaim the VAT isn't the fault of Google, this is the case with any company.

[MarillionFan]

Don't like it, then get the ISPS to block the google address and be done with it.