Google £130m UK back-tax deal lambasted as ‘derisory’ by expert

Tax expert says firm has paid equivalent of just 2.77% of profits over last decade compared to standard 20%

Google's attempt to counter criticism of its tax arrangements by agreeing to make a back payment of 130m in the UK unravelled after claims that the internet giant had effectively paid an annual rate of corporation tax of just 2.77% over the last decade. Most British businesses currently pay corporation tax on 20% of their profits. But even after the extra payment, the internet giant is said to have paid just 200m in tax since 2005, on estimated profits in the UK of 7.2bn.

Professor Prem Sikka, a tax avoidance expert at the University of Essex, estimated that the company has avoided around 1.6bn in taxes over the decade, despite earning 10% of its global revenues in the UK. Sikka made the claim in response to a deal under which Google agreed to pay 130m in additional tax, on top of the 70m it has already paid on its profits in the UK since 2005.

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