Google’s possible tax avoidance row gets bigger, Schmidt criticises politicians

Google’s possible tax avoidance row gets bigger and more heated in the UK as Labour leader Ed Miliband promises action, whilst Google Chief Eric Schmidt criticises UK politicians.

Factually both leaders agree on one issue, international tax reform. Schmidt was quoted as saying he wishes to move the avoidance “away from accusation and toward action” for global firms to be more transparent of their tax structures.

Schmidt acts as an advisor to Chancellor George Osborne, and at a meeting of business leaders led by Conservative Prime Minister David Cameron yesterday, will have likely called for tax reform to be at the top of the next agenda.

Opposition leader Miliband on the other hand states: “Now, what is the politicians' responsibility: change the law. But it is also to talk about the kind of society we want to create and what the responsibilities of a company like Google are.”

The debate arises over paying only £3.4 million tax from £3.2 billion in sales; Google’s defence being that sales are made from low-tax Ireland.

Around 150 London-based employees’ LinkedIn profiles say differently, with many quoting: "negotiating deals", closing "strategic and revenue deals" and achieving "quarterly sales quotas" as some of their roles.

Former Google executive Barney Jones increases credibility of the issue; in a quote to the Sunday Times saying British taxpayers are being “cheated” by the company.

The question here is: is he just a whistle-blower? Jones led the team now known as ‘Account Strategists’ which would give him some insight to the inner-workings of the company’s sales operations.

He goes on to say: "It [Google] 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."

Google isn’t the only high-profile technology company as of late to be criticised for its tax handling in the UK; it is clearly an urgent matter to be addressed by politicians of current or future parties to prevent further damage to the economy.

Amazon is also under fire, but the tax avoidance is more a “work of art” according to a fantastic article from David Mitchell in The Guardian, with Amazon never having to claim “don’t be evil”, as is Google’s famed slogan.

So is there any respite in sight for Google? Not so easily – the Canadian Competition Bureau is the latest to take a swing with an antitrust probe.

What do you think of Google’s treatment of tax? Do they have a case, or should take responsibility?

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