Oh aye Maggie?

Google’s 2,300 staff in the UK earned an average wage of £160,000 each last year, despite the group’s insistence that its British operation is a modest outpost of the company’s global empire.

Margaret Hodge, the former chair of the public accounts committee, said high pay among London staff was further evidence that Google’s “complex structure of companies is a sham”. Its UK employees mainly provide marketing and support services to offices in Dublin.

“This unmasks the reality of their business,” Hodge said. “[Google UK] is not a back office support operation. These are clearly people who are paid a lot because they add value – selling advertising, closing deals and developing new products.”

You know what adds value in a tech company, do you? Who does so?

Remarkable.

And then we get to the point that really is being missed here, they’ll all be paying marginal income and NI rates of 50% and more on those incomes. You know, lots of tax you stupid fucking cow?

32 thoughts on “Oh aye Maggie?”

  1. Google has about 60,000 employees worldwide. About 5,000 in Ireland.

    So, yes, the relatively small 2,300-strong UK outfit would appear to be a branch office.

    These are clearly people who are paid a lot because they add value – selling advertising, closing deals and developing new products.

    Successful sales people earn good money SHOCKER.

    And not that it’s relevant to their tax obligations, but does Google UK develop new products? Can anybody think of any?

  2. I pointed this out on CiF and was shot down. What, employers pay their employees’ tax?!?! How dare you pollute our argument with facts. Presumably they would prefer a world where Google employees are paid £10,000 and so pay no income tax, and the money that would otherwise have gone to the Exchequer in employee income tax would go in corporation tax instead.

  3. Tim

    The fact that employees pay tax on their earning is neither here nor there. It’s irrelevant to the argument. The UK has a corporation tax. A corporations should pay corporation tax by law. The same as employees have to pay income tax.

    You are being wilfully dishonest.

    Hodge’s statement is correct. Why are there 2,300 employees on a big salary working in the UK when Google says it only does support and marketing.

    That’s either a shit load of marketing, I mean for 2,300 people earning £160,000, that’s a serious campaign, strangely, for a company that doesn’t has no profitable presence in the UK.

    Ah but it’s ok. Ironman knows, it’s all about the HMRC tea boy.

  4. Jebus, Arnald.

    I’m not saying you’re thick, but you probably eat chewing gum off the ground.

    Why are there 2,300 employees on a big salary working in the UK when Google says it only does support and marketing.

    They’re an advertising and cloud services company. If you sell a lot of advertising or compute/storage/whatever, you’re going to earn good commission.

    £160k is good, but it’s hardly big money. Especially in London.

  5. 2300 people are NOT earning £160K in any meaningful way. The 160K is the average (almost certainly mean) salary. So probably 3-5 on £1-2M+ and most of the rest on much more modest numbers

  6. Ah, OK, they’re an advertising and cloud services company.

    In the UK, for the UK market. A full company presence in the UK, making Google UK lots of money, in the UK. Selling UK companies UK advertising for UK punters to click on, on google.co.uk.

    Apparently not.

  7. I really think this is something people don’t get about some modern business models. The companies started with very little capital. Mostly they were a couple blokes with a good idea. And they’re really not much different now. Just a lot more blokes (& blokesses of course). There’s not much in the way of factories & land & plant & all the other things typified big industry. Even where they provide a product, they mostly don’t actually manufacture the product themselves. It’s outwork.
    So what they really are is people. The people are the capital. So, mostly, they’re a way of turning added value into wages. They don’t need to make much profit because they haven’t got a capital base to service.
    Look at Amazon. Started as a bookshop. Does it actually own anything? Has any sizeable outside investment been needed? If it just kept growing, paid most of its operating profit out in wages & a cut for the founders, ploughed the rest back in to grow some more. Why does it have to produce a net profit at all?

  8. > A small company simply couldn’t get away with that. It’s a false argument.

    I own a small company. It’s just me. Most of my sales are in the US. I pay zero corporation tax in the US.

    Looks like I’m “getting away with it”!

  9. Arnald – just out of interest, do you prefer Peppermint or Juicy Fruits?

    In the UK, for the UK market. A full company presence in the UK, making Google UK lots of money, in the UK. Selling UK companies UK advertising for UK punters to click on, on google.co.uk.

    Yeah, you’ve got them. It’s all a big scam, and they’d have gotten away with it, too! If it weren’t for you darned, pesky kids.

    Google’s London HQ is actually a papier mache facade to hide their Scrooge McDuck-style giant money bin.

  10. I can buy the Irish Times, the Straits Times, Japan Today, South China Morning Post in my local newsagent. When are they going to pay their UK Corporation Tax, the bastaerds!!!!

  11. If you’re going to refer to the saintly Ms Hodge, please use the correct soubriquet of ‘Enver’. And don’t mention Stemcor. I may have mentioned it once, but I think I got away with it.

  12. In what way can a small company not get away with paying 0% corporation tax by paying all profits out as salaries? Why is this difficult?

    Corp tax is assessed after costs because it’s a profit tax (profit = revenues – costs). Salaries are a cost. It’s really that simple.

  13. The idea that big companies have an advantage over small companies in these matters is wrong.

    We’re lucky in the UK. The sort of people who become independent builders, used car dealers and double-glazers are drawn only from the most respectable – some would say Puritanical – families in Britain, and thus wrong-doing is unheard of.

    However, we are entirely dependent on their collective High Moral Purpose. If they wanted to avoid a little tax, they could very easily indeed.

  14. Ah, OK, they’re an advertising and cloud services company.

    In the UK, for the UK market. A full company presence in the UK, making Google UK lots of money, in the UK. Selling UK companies UK advertising for UK punters to click on, on google.co.uk.

    Apparently not.

    What makes you think every Google employee in the UK is a salesman?

    They do a lot of software development here. None of that development directly sells any advertising. They have to pay those developers to do that development, but generate little direct income. They therefore make little profit in the UK, so pay minimal profits tax. Their employees however, pay vast amounts of income tax and job tax (both varieties of NI). The ads would still be sold from Ireland, whether they developed software in the UK or not.

    How is that so difficult to understand?

  15. “I own a small company. It’s just me. Most of my sales are in the US. I pay zero corporation tax in the US.”

    Yep, so? Do you have a massive operation supporting your software and selling advertising to the US market, based in the US? Do you have subsidiaries in tax havens?

  16. BiW

    How does Google UK make money?

    Where are the people that make that money and what do they do?

    What possible reason would they have to buy services from Google Eire?

    Google UK have a cloud services company?

    In which market is that service supporting?

    Why isn’t the whole operation based in Ireland?

    Yep, it’s all in the rules, but it looks odd and they end up paying no tax. Well, they do, in the form of a sweetheart deal.

    Why do they feel the need to do such a deal?

  17. “Do you have a massive operation supporting your software and selling advertising to the US market, based in the US?”

    Yes, I hire someone overthere to talk “yankie” to the locals. It works well. He bills me for the service he provides that delivers lots of nice sales, for my company based in the UK / Eire (delete as appropriate).

    “Do you have subsidiaries in tax havens?”

    What? What’s that got to with my sales to US customers?. Is this some sort of moral prime directive? Subsidiary in a tax haven means I can’t ever sell anything to Americans? But the UK itself is a tax haven – Richard told me that himself?

  18. It can’t be a sweetheart deal if the same deal is available to anyone that cares to take it. And it is.

  19. Left now outraged that Google avoids corporation tax by distributing profit to the workers in the form of salaries.

  20. A small company simply couldn’t get away with that.

    Small companies can occasionally get away with employing 2,300 people on £160k per year, but it’s rare.

  21. A friend of mine works for google. Quite senior.

    HIs job? Helping develop a software company which is based in the US. So nothing he does here is directly relevant to the UK.

  22. I understand that a very large part of the £160k per employee is share-based payments, not salaries. The amount the employees get is based on the share price of Google US, not the work done in the UK.

    Small companies can quite happily do that. They tend not to because the cost would be essentially borne by the existing shareholders, who in a small company tend not to want to give their own money away. For a listed company it’s different: you’re giving away money that belongs to faceless investors who can’t see the impact so clearly 🙂

  23. bloke in spain:
    There’s not much in the way of factories & land & plant & all the other things typified big industry.

    Look at Amazon. Started as a bookshop. Does it actually own anything?

    Google, Amazon et al are much more like big industries than you’d think, thanks to all the investment they have to make in numerous huge datacentres around the world. They have to put their millions of servers somewhere. These companies are increasingly designing their own hardware: systems, network switches, even electrical infrastructure such as transformers.

    Now, the myriad of web companies than just run their businesses on the clouds provided by Google, Amazon et al …

  24. Take all the virtue-signalling out, and it’s quite simple.

    1) Does Google pay CT on its profits “somewhere”?

    2) Is that “somewhere” legal. And does it make sense?

    If Yes, and then No or Noish, then it’s the politicians that need to work things out. Tax is a cost, and Google is a business.

    The Single Market and the internet have made all this more complicated. That’s the issue. Holier-than-thou wailing will help not at all.

  25. Arnald babbles:

    “Yep, so? Do you have a massive operation supporting your software and selling advertising to the US market, based in the US? Do you have subsidiaries in tax havens?”

    So if Google sacked all their UK staff and handled everything remotely from the US you’d have absolutely no problem with them paying 0% corporation tax on all those UK sales then? Thought not.

  26. The UK has a corporation tax. A corporations should pay corporation tax by law.

    And they do – Maggie’s problem is that she speaks at length about things that she either does not understand or willfully misrepresents. What’s your excuse?

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