Exclusive: Britain to quiz Google and auditor again on tax

Wed May 1, 2013 11:44am EDT
 
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By Tom Bergin

LONDON (Reuters) - Executives from Google Inc. and its auditor Ernst & Young will be called again to a British parliament committee to testify on tax, after a Reuters investigation highlighted inconsistencies in the way Google portrays its activities in Britain, the committee's chairwoman told Reuters.

Margaret Hodge, head of the Public Accounts Committee (PAC), which is tasked with ensuring value in government financial affairs, said she would summon the companies' representatives to explain previous comments to the committee in light of the report. The investigation found that while Google executive Matt Brittin said Google doesn't make sales to UK customers from the UK, some of its staff and UK customers think it does.

Lawyers and academics say that if UK staff did sell to UK customers, that could have implications for Google's tax status in Britain, opening the possibility of much bigger tax bills. Google called the Reuters story misleading.

Brittin, Google's Vice President for Northern and Central Europe, told the PAC in November that "Nobody (in the UK) is selling." He said Google employs "a couple of hundred" staff at its European headquarters in Dublin who are responsible for selling to UK clients. The people "on the ground (in the UK) are helping people make the most of the web," he said, "and the people in Ireland are helping to operate the systems and sell advertising to the businesses that want to work with us."

Google's own corporate website claims sales teams are based in London, and advertises jobs for London-based sales staff, whose duties include "negotiating deals", closing "strategic and revenue deals" and achieving "quarterly sales quotas".

Interviews with more than a dozen customers and former staff, and an examination of job advertisements, CVs and endorsements on networking website LinkedIn show many roles that go further than marketing, to actually target, negotiate and close sales of Google's advertising products.

"All the people you tend to deal with are in London," said Simon Andrews, founder of advertising agency Addictive, whose business plans and buys advertising campaigns on behalf of clients. "You would never know about the Dublin thing apart from if you looked closely at the address on the invoices. All the people are based in London."

The profiles of around 150 London-based employees on the LinkedIn networking website said they were involved in formulating sales strategy, managing sales teams, closing deals or other sales work.   Continued...

 
A view shows an office block at Central St Giles where Google has offices, in London April 23, 2013. Picture taken April 23, 2013. REUTERS/Luke Macgregor