Filings by Google’s UK subsidiary show that £33m of the funds paid to the Treasury followed a wrangle over share options handed to staff, which the US business had argued were exempt from UK tax.
The company’s accounts show that the government was only able to claw back less than £100m in corporation tax from Google for the 2005-2014 period, and not the £130m the chancellor claimed. MPs and foreign governments have criticised the deal for allowing Google to generate billions of pounds in profits from its UK business and pay little corporation tax.
Well, that’s The Guardian. And I very much doubt that anyone was trying to argue that share option grants are tax exempt. An allowable expense perhaps, but that’s something rather different. But here’s Murph:
Richard Murphy, a tax expert who advises the Labour leader, Jeremy Corbyn, on economic policy, said most major US corporations had attempted to depress their tax bills by charging subsidiaries the cost of share options to staff, and that all had been ruled out by HMRC.
He said it was unclear why HMRC had failed until now to force Google to comply. “What was already a poor deal for the government is now looking even worse,” Murphy said. “And it looks like HMRC’s mess-up. I would say it clearly shows that HMRC is under-resourced and is struggling to cope in negotiations with major corporations.”
Can’t see how it would depress tax bills really. Because what is on offer is stock in the parent company. So it’s going to be an allowable expense at some point. If not in the subsidiary then at the parent level, no?
Someone here is confused and it might well be me but don’t think so.