Brittin told the PAC last year that “nobody” in Google’s UK office was selling advertising on its website. When he asked to give further evidence last week, he admitted “a lot of the aspects of selling” did take place in London but the deals were “closed” by staff of Google’s Irish subsidiary.
The distinction is crucial because if deals were finalised by London-based staff, Google could be deemed to have made profits on the contracts which would be taxable in Britain, rather than low-tax Ireland. “It uses a concocted scheme to avoid tax. It’s a smoke-screen to distort where the substance of its economic activity is really taking place,” Jones told The Sunday Times.
He said he attended meetings where Google’s London sales staff closed deals, including winning contracts from eBay, the online auction site, Kelkoo, a price comparison website, and Lloyds TSB. He showed The Sunday Times contracts, invoices and correspondence between Google and its customers in Britain. One 2004 contract had the address of Google’s London headquarters next to the heading. Clients would be sold deals by Google staff in London, who were in charge of sending out contracts and receiving signed documents back from clients. In addition, British clients paid money into British bank accounts for Google services.
The distinction is crucial because if deals were finalised by London-based staff, Google could be deemed to have made profits on the contracts which would be taxable in Britain, rather than low-tax Ireland. “It uses a concocted scheme to avoid tax. It’s a smoke-screen to distort where the substance of its economic activity is really taking place,” Jones told The Sunday Times.
He said he attended meetings where Google’s London sales staff closed deals, including winning contracts from eBay, the online auction site, Kelkoo, a price comparison website, and Lloyds TSB. He showed The Sunday Times contracts, invoices and correspondence between Google and its customers in Britain. One 2004 contract had the address of Google’s London headquarters next to the heading. Clients would be sold deals by Google staff in London, who were in charge of sending out contracts and receiving signed documents back from clients. In addition, British clients paid money into British bank accounts for Google services.