Declarations made by Google to a House of Commons inquiry that advertising sales are handled by Dublin-based staff have been brought into serious question, following allegations that much of the work is done by the company's London office.
Last night, the Commons’ Public Accounts Committee announced that it will demand that a senior Google executive and the company’s auditors, Ernst & Young, return before them to clarify evidence that they gave on the issue late last year.
Following months of inquiry, Reuters last night reported that it has found that many of the staff involved in closing advertising deals are based in London, which, if confirmed, could see Google facing millions in extra taxation from British tax authorities.
Last November, Google executive Matt Brittin told MPs: "Everybody who buys advertising from Google [in the UK] – because that is how we make our money – buys advertising from Google in Ireland."
Denial
Last night, Google denied that it had misled MPs, saying the London-based staff are "digital consultants" who do not handle sales contracts, though advertisers have told Google that they never deal with anyone in the company's Dublin offices.
Two years ago, the internet search engine giant paid £6 million in tax to the UK taxman on the £395 million it declared in UK revenue. Between 2006 and 2011, the company generated £11.5 billion in the UK, yet paid £10.3 million in tax, it has been reported.
"We will need to very quickly call back the Google executives to give them a chance to explain themselves and to ensure that actually what they told us first time around is not being economical with the truth," said the chair of the Commons' PAC committee, Margaret Hodge.
Ernst & Young, meanwhile, will be challenged to back up its statement to MPs that they had made their own checks on Google’s London operations: ”The evidence they gave was clear and unambiguous,” Mrs Hodge declared pointedly last night.
Facing detailed questioning from Mrs Hodge last November, Mr Brittin insisted that “anybody who buys advertising from us in Europe buys from Google in Ireland from our expert team”, even if the are “encouraged” to do so by London staff.
“Nobody [in the UK] is selling or promoting the products, but they are definitely encouraging people to spend money on Google. No one is buying from them,” he told the Labour chair of the influential Commons committee.
