The Guardian in complete innumeracy shock

Google paid just £11.6m in UK corporation tax last year, despite revenues of £506m and a £36.8m profit, according to documents filed at Companies House.

Err, yes?

What’s the corporation tax rate (for last year, obviously)? 26% or something?

Umm, I’ve got a 31% tax rate there, 11.6 on 36.8.

So the complaint is that Google paid above the statutory rate or something?

What am I missing here? Or are they really being that dumb?

33 comments on “The Guardian in complete innumeracy shock

  1. I’m sure they’ve got a calculator somewhere in the office. They just don’t understand esoteric financial terms like ‘revenue’ and ‘profit’. Mind you, it’s some time since they saw what profit looked like, I suppose…

  2. Ah they can’t understand how Google makes only £37.8m profit on a turnover of £506m when the Guardian, on a turnover of……Oh hang on.

  3. Doesn’t Google realise all your monies are belong to us???

    Anyway, how much corporation tax did The Guardian pay last year?

  4. Lordy

    Leftyism (as opposed to socialism, which is something else and which they wouldn’t like either) is the new autism.

  5. Didn’t you get the memo ?

    Tax rates are now set by asking Twitter as following the tax code is too boring.

  6. I’m sorry, so sorry. We were so wrong. Without government there’s nothing to protect us from our baser impulses.
    Roving rape-gangs terrorize my town as we speak. Eugenicist patrols round up the poor and other ‘undesirables’, the extermination factories are running night and day.

    The national parks were the first things to go, now the roads are gone.

    I cower inside, huddle around the glow of the monitor for as long as the fuel for my generator lasts. The food’s gone and the water won’t last much longer.

    I’ll keep in contact for as long as I can – hopefully you over in Europe can learn from our mistakes. If only we had the NHS.

    Oh god they’re here

  7. I think though there is a kind of sense in this. It’s the inconsistency that businesses pay taxes on profits, whereas individuals pay taxes on turnover (i.e. income). So a business can have squillions of income and pay no tax at all, whereas Joe Soap earns 15k and pays taxes on it just for earning the money, even though he most certainly has no profit at the end of the year.

    Ordinary workers paying a turnover tax naturally look at businesses paying a profit tax and it does look rather unfair. Perhaps businesses should just get an income allowance and then pay tax on everything above that. Or, workers should only pay tax on any savings they’ve made at the end of the tax year.

    It’s the inconsistency that creates the jealousy.

  8. @IanB: actually individuals pay tax on profit, not turnover. It just seems that way because there are fewer things that individuals can deduct as expenses.

    Maybe companies should get a personal allowance?

  9. Brown gave comapnies a personal allowance of £10k.

    He had to withdraw it a few years later due to blatant abuse: companies were paying no tax on profit in the 0% band – using the “0% x £10,000 = £nil” loophole – which was something that he hadn’t anticipated and certainly never intended to happen.

  10. @IanB: if you have deductions that you can make against tax then fill out an SA100 after 5th of April and you’ll get some back.

    The method of tax collection (PAYE) obscures, but doesn’t change, the tax’s fundamental nature.

    This is a little harder to see in the UK than in a place like Australia where there’s more things that can be deducted from personal income tax and everyone has to fill out a tax return at the end of the year even if they only earn PAYG.

  11. Being able to claim back for your workboots and a small list of other things doesn’t stop it being a turnover tax. The clue is in the name- “income tax”.

  12. they also made a loss on UK statutory profit last year and so should have claimed that to reduce the tax bill to zero this year; they seem voluntarily not to have done so

  13. @ Ian B – At first glance, what you’ve written there is madness but it’s actually something I’ve thought about a few times down the years since becoming self-employed.

    As a self-employed person, I can claim against my income the running of my car if I use it for business purposes.

    As an employee, I couldn’t deduct a fraction of the cost of running the car to get me to work and back as an expense (or at least I don’t think I could – maybe I’m owed thousands in tax-rebates?)

    Ditto things like your work shirts, work shoes, ties etc etc

    Maybe everyone should become self-employed but contract themselves out to what used to be their employers? In practice, nothing much would change, you’d turn up, do your job, go home and be back tomorrow.

    You’d have a bit more control over exactly how much you get taxed, though.

  14. The Guardian thinks that Google should pay tax to the UK on the profit it makes in Ireland. Is that innumeracy or failing to learn 20th century history (Irish independence in 1922)?

  15. Anthem-

    That’s something I’ve been sort of arguing for some time. It may be time to abolish “employment”. There’s some evidence that that is where the economy wants to go anyway.

    I presume part of the reason HM.gov are not keen on the idea is that they very much like the current system of hoovering taxes out of wages at source.

  16. Imagine if they paid nothing in tax? We could look at Google and how it’s costing £506M/annum to provide search, maps, email, the OS for most phones now sold, turn-by-turn navigation and blogging facilities.

    Can anyone imagine government being able to do all of that for even close to the same money? The cost of getting wi-fi on trains is being quoted at £2.5bn.

  17. I suppose that the profit for Corporation Tax purposes is somewhat higher than the headline accounting profit – the two numbers are calculated differently.

    But the objection is to the legal but contrived strategy Google is using to relocate profits from England to Ireland to Bermuda (the double Irish with a Dutch sandwich) – in this context the turnover is relevant. It seems to me that the strategy is inconsistent with its “don’t be evil” motto. I understand that tastes may differ.

  18. Moving profits from Ireland to Bermuda last I heard of it was post tax, as you say legal. Beats moving it to the USA. Perhaps the local press in Bermuda should have a say in whats happening?

  19. of course, most of those calling for higher income taxes (including most luvies and half the BBC) are ‘self employed consultants’ so can claim all sorts of things against their turnover before paying tax. Meanwhile politicians get large tax free allowances so in effect they too deduct large amount of ‘costs from their turnover. A minister might pay £40k or so on his £100k salary, but if you add in his £130k of allowances then he pays a turnover tax of around 15% – as the odious Austin Mitchell chose to ignore when criticising Prince Charles. It’s only the majority of poor plebs on PAYE that get stuffed every time the luvies call for things to be ‘more equal@

  20. “Maybe everyone should become self-employed but contract themselves out to what used to be their employers? In practice, nothing much would change, you’d turn up, do your job, go home and be back tomorrow.”

    Hello IR35 and disguised employment. Watch as you get hit for the backdated PAYE but don’t get the backdated employee benfits. And presuambly they throw in some penalties…

  21. But Corporations are people! Comparison of income versus business tax is just muddying the water because the worker is eventually paying both (either as lower wages, higher goods prices or reduced shareholdings).

  22. Anthem and Ian B:

    “Maybe everyone should become self-employed but contract themselves out to what used to be their employers?”

    As I understand it, HMRC would step ind object to that. They reserve the right to decide if you are employed or self-employed, no matter what you declare yourself as. See ‘Our Obligations’ at this link.

  23. Dick-

    Yes, but we’re discussing hypothetical future ways-of-living kind of thing, not things-as-they-are. Hence “everyone”. It would be effectively the abolition of employment-as-we-know-it, with everybody treated as a contractor.

    I think it has a lot going for it, myself. It would give people a lot more flexibility and hopefully start to get rid of the master-serf mentality.

  24. Just for your information
    Google UK has filed its accounts at Companies House today, October 2nd but they are not yet available for inspection.
    On October 1st The Grauniad stated that they had been filed.
    A trivial but very blatant little lie.

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