This pisses Ritchie off good and proper

Given the profit margins we can see in Google’s parent company accounts £13 million a year is a very minor change indeed. The usual suspects aren’t happy:

However, Prems Sikka, Professor of Accounting at Essex University said the settlement looked like a “sweetheart deal.”

He said that for a company that enjoyed UK turnover of around 24 billion pounds over the period and margins of 30 percent, the settlement represented an effective tax rate in the low single digits for Google.

“This is a lousy number and we need to know more,” he said. Richard Murphy, a tax expert who has advised the opposition Labor leader, Jeremy Corbyn, on economic policy, said the deal was “a disaster” and that, based on the turnover and margins Google enjoyed, “They should have been paying 200 million pounds a year.”

Those estimates of tax avoidance are looking a bit weak now, aren’t they?

14 thoughts on “This pisses Ritchie off good and proper”

  1. John McD is, as I write, quoting Murphy’s figures on Radio 5, and warning that Prof Sikka is correct and the government have done a sweetheart deal – missing out on a huge amount of tax that (by Murphy/Sikka’s reckoning) could and should have been collected. He then cited Vodafone as a prior example.

  2. As with your last thread, I suspect you’re simply not going to be able to use actual figures arrived at as definitive and incontrovertible evidence of a smaller tax gap because those figures will simply be deemed incorrect by the usual subjects – regardless whether they originate from HMRC or Brussels.

  3. The “tax gap” is defined asthe difference between what is paid and *what Murphy thinks should be paid* – the actual legal requirement is irrelevant.

  4. “John McD is, as I write, quoting Murphy’s figures on Radio 5”

    How ironic. Remind me again: how much foreign tax toes the BBC pay when it’s programmes are shown on foreign TV? These are “foreign” profits, blah, blah!

  5. Well, McDonnell is as thick as pigpoo or laughably dishonest (unsure which, possibly both). I notice we had the usual absurd claims about £140bn being available through tax changes which I guess is Ritchie’s rubbish (£120bn tax avoidance) and Farnsworth’s rubbish (£93bn corporate subsidy) somehow combined.

    It is difficult to say how the public sector paying the private sector to do something is a subsidy. If Farnsworth pays a plumber to fix his central heating is he ‘subsidising’ the plumber, is it ‘welfare’ to the plumber ?

    Whenever some dumb leftie points this out (they cut and paste it regularly) I tend to ask them why Brown didn’t make these changes rather than borrowing £150bn pa ; yet to get an answer to this.

    Another, tiny detail is that if they were paying £200m more a year, which as it’s the Dumb Donkey from Downham is going to be a upper band on the value, this actually isn’t going to help much if you are running £100bn deficit annually.

  6. “Well, McDonnell is as thick as pigpoo or laughably dishonest (unsure which, possibly both).”

    One test for this will be to see what arrives in his tax and spending plans, assuming his faction is still in control of the Labour party at manifesto time.

    Then we will see if he really believes that there is circa £100 billion just sitting there waiting to be properly taxed, but which inexplicably all previous CoEs have ignored (maybe not inexplicably, maybe it was all “corporate lobbying” or active Tory malice). Or whether he plans on the basis of rather less being available for the picking.

  7. Why does it matter if it’s £1 or £1,000m? Richie thinks the BoE can just print all the money it needs. Why go through the hassle and bother of collecting taxes at all?

  8. Why go through the hassle and bother of collecting taxes at all?

    Because it’s a key doctrine of the Religion of Equalidee?

  9. I’m seeing figures of trillions being bandied about in 38 degrees and bullshit like Avaaz as well as by the usual Corbynite loons – why do we give any credence to these patently absurd claims?

  10. Google’s an American company, I’d expect it to pay it’s taxes in America.

    Oh wait, companies should pay taxes where they make their sales now. Ok, when is HMRC going to chase Kenkyusha Tokyo for the tax on the dictionary I bought?

  11. The dimbos think they can claim taxes both by company domicile *and* transactions. It’s their credulous belief in the magic money tree that’s the basic problem.

    38 degrees were named after the average IQ of those that sign their petitions ; the Corbynistas can’t manage that so they make their own rants up on twitter.

  12. They are right about one thing: this deal is indeed “a disaster”.

    This suggests that big corporates can be bullied and strong-armed into trying to pay to get the leftist baying hounds off their case. The correct approach is to say “prove in court that we have underpaid tax. Otherwise, off you jolly well piss. And take your libel with you.”

    Compared with which, this deal is indeed an absolute disaster.

  13. Google (and Starbucks and Amazon …) can be subject to (im)moral pressure – their customers (or, rather, users in Google’s case, their customers are advertisers) are the general public and if a campaign can persuade enough of them to stay away, it may be worth coughing a few million to take the heat off.

    Good luck with trying this strategy on Stemcor (to take a random example).

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