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Former Google UK exec alleges company misrepresented sales to avoid paying taxes

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Google New York Chelsea Office (STOCK)
Google New York Chelsea Office (STOCK)

Google and other tech companies have come under fire for exploiting a common tax loophole to book revenues through their Irish subsidiaries, but today The Sunday Times is reporting that a former Google UK executive has evidence of further tax avoidance by his one-time employer. Barney Jones worked for Google between 2002 and 2006 and says that during his time at the company, Google relied almost exclusively on its UK sales staff to secure advertising deals in London, effectively closing deals there rather than in Dublin, where it booked the revenues. Google VP Matt Brittin had previously testified to the Commons Public Accounts Committee (PAC) that "nobody" at Google’s UK office was selling Google advertising, last week revising his statement to clarify that while "a lot of the aspects of selling" ads did happen in London, the Dublin office was actually the one closing the deals.

Jones claims that London sales staff were in charge of sending out ad contracts

The Sunday Times writes that Jones will be submitting some 100,000 documents and emails to HM Revenue and Customs (HMRC) that clarify the innerworkings of Google’s ad operations. In particular, Jones claims that London sales staff were in charge of sending out ad contracts and receiving signed copies back from clients, which could poke holes in Brittin's earlier testimony. It also notes that Ireland's corporate tax rate currently sits at 12.5 percent, just over half of the UK's 23 percent tax on corporate income.

It’s not clear whether the evidence is enough to show malfeasance on Google’s part, but Jones's claims do add another layer of complexity to the investigations into the company's tax practices in the UK. Commenting to The Sunday Times, Google's director of external relations said that "none of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law," but that it was unable to respond to documents that haven’t yet been made public. We’ve reached out to Google for comment and will update if we hear anything back.