Did Google's clever accounting cost the UK's coffers £150m last year?

The row over Google's alleged tax dodging antics has been reignited with news the web giant only forked over £11.6 million on £3.4 billion of UK-generated income in 2012.

The company has long been accused of using clever accounting practices to avoid paying more taxes to the Her Majesty by basing its operations in Ireland and sending revenue to tax havens like Bermuda.

By accounting this way, Richard Murphy of Tax Research UK estimates that "Google may have reduced its tax bill by around £150 million last year."

Furthermore, in its annual report the company claimed £37m of profit on £506m of UK-based revenues, but its annual report tells a different story. The £3.4 billion figure mentioned above is 11 per cent of its total revenue. Something doesn't add up.

Uncle Sam comes first

Google has been the subject of calls from the government for a full HMRC investigation into its tax practices, with the company still insisting it is paying the tax it is required to by law.

In a statement issued today Google once again defended its policies, claiming the 'majority' of its corporation tax was forked over to Uncle Sam in its US homeland.

Google said: "Like most multinationals, we pay the bulk of our £1.2billion corporate tax bill where our business originated, the US.

"That's a rate of more than 19%, roughly what a UK-based company would pay. We're also a significant contributor to the UK economy – having created more than 2,000 jobs."

• Ed Miliband is upset with Google's tax policies too. That should scare them, eh?

Via Guardian