Osborne just bought a big gift for his friends, and handed the bill to the taxpayer

Support us and go ad-free

The chancellor, George Osborne, has described his tax deal with Google as a “victory” and argued that it was “a real vindication of this government’s approach”. While it certainly isn’t a victory, it definitely underpins this government’s approach: one set of rules for the rich and powerful, and another set of rules for the rest of us.

Google has a financial structure which means that its cash generated in the UK is directed into accounts in Ireland and Amsterdam and then into a tax haven in Bermuda.

It is estimated that Google has avoided around £1.6bn over 10 years, even though it has generated 10% of its revenues in the UK. Osborne has got Google to pay back £130m, but this means that the search engine has paid only £200m in tax since 2005, despite its UK profits being more than £7bn. This is the equivalent of paying less than 3% corporation tax, despite the corporation tax rate being 20%.

But Osborne asserted that it was a “really positive step”:

This is a major success of our tax policy. We’ve got Google to pay taxes and I think that is a huge step forward and addresses that perfectly legitimate public anger that large corporations have not been paying tax. I think it’s a really positive step. I think it’s a big step forward and a victory for the government

While Osborne proudly trumpeted getting a company to do a small amount of what it should be doing all the time anyway, tax expert, Richard Murphy expressed outrage at the deal, which allows Google to get away with paying only a small fraction of the tax due:

I can’t understand why the deal with Google is so cheap. I’m worried if they are going to repeat that with other companies. What was agreed is far removed from what is required for sustainable corporation tax in future. They are undermining the new international tax consensus which David Cameron and George Osborne have worked for, supposedly.

Read on...

Support us and go ad-free

The head of Google Europe, Matt Brittin said:

We want to ensure that we pay the right amount of tax

Though Brittin seems to miss the point that Google is not paying the corporation tax it should be paying.

The Labour shadow chancellor, John McDonnell, said that it was “unacceptable when most people in this country pay much more”.

It appears the government’s view is that something is better than nothing, but it sets a dangerous precedent for other corporations to request equally favourable deals. This could lead to rich corporations having a smaller tax rate- as low as 3%- while small businesses have to pay a much higher rate of 20%. This, as Osborne has said, is “a real vindication of this government’s approach”… to inequality. Google paying its 20% share of tax could transform the lives of those that have been hit by austerity measures:

– Welfare cuts have been linked to people to killing themselves

– Pensioners are being charged for falling over

– Students are facing cuts to grants, meaning they cannot afford housing and many are suffering mental health issues due to financial stress

– Less than 1% of welfare claims are fraudulent (around £1bn) but over £5bn is lost in tax avoided by the rich

Despite the fact ordinary people are struggling, large corporations operating within the UK are allowed to contribute as little as possible to the treasury. The fact the government sees this as a “victory” really shows where their loyalty lies.

Get involved!

Support the Canary so we can keep exposing this government.

Write to your MP to let them know how you feel about the government’s over-friendly relationship with big business.

Support UK Uncut or get involved with other organisations campaigning against our current system of socialism for the rich and capitalism for the poor.

Featured image via Flickr and Wikimedia

Support us and go ad-free

We need your help to keep speaking the truth

Every story that you have come to us with; each injustice you have asked us to investigate; every campaign we have fought; each of your unheard voices we amplified; we do this for you. We are making a difference on your behalf.

Our fight is your fight. You’ve supported our collective struggle every time you gave us a like; and every time you shared our work across social media. Now we need you to support us with a monthly donation.

We have published nearly 2,000 articles and over 50 films in 2021. And we want to do this and more in 2022 but we don’t have enough money to go on at this pace. So, if you value our work and want us to continue then please join us and be part of The Canary family.

In return, you get:

* Advert free reading experience
* Quarterly group video call with the Editor-in-Chief
* Behind the scenes monthly e-newsletter
* 20% discount in our shop

Almost all of our spending goes to the people who make The Canary’s content. So your contribution directly supports our writers and enables us to continue to do what we do: speaking truth, powered by you. We have weathered many attempts to shut us down and silence our vital opposition to an increasingly fascist government and right-wing mainstream media.

With your help we can continue:

* Holding political and state power to account
* Advocating for the people the system marginalises
* Being a media outlet that upholds the highest standards
* Campaigning on the issues others won’t
* Putting your lives central to everything we do

We are a drop of truth in an ocean of deceit. But we can’t do this without your support. So please, can you help us continue the fight?

The Canary Support us

Comments are closed