Google parent Alphabet will pay GBP 130 million to settle a tax case with the UK authorities, Bloomberg reported, saying the deal covers taxes going back to 2005. The move has brought sharp criticism as opposition politicians in the UK question how the government handled the case.
While Chancellor of the Exchequer George Osborne said on Twitter that it was a “victory” for the government’s policies, Shadow Chancellor John McDonnell told the BBC that the bill was “derisory” and looked like a “sweetheart deal,” and that he would call for it to be investigated by the public sector watchdog.
Alphabet has been criticized for paying a fraction of the taxes due on sales in the UK. For example, the company paid USD 16 million in UK corporation tax from 2006 to 2011, on USD 18 billion of revenue, according to a panel in 2013. Google said it agreed a "new approach" for its UK taxes with the UK tax authority HMRC. Going forward it will pay tax based on its revenue from UK-based advertisers, to reflect better the size of its business in the UK.
