HMRC confirms Google investigation during committee hearing

Officials are examining whistleblower's evidence but what effect, if any, it will have on firm's tax structuring remains unclear

Top HMRC officials effectively confirmed they were investigating the UK tax affairs of Google on Monday, giving evidence to the indomitable Margaret Hodge and her public accounts committee. Away from the Palace of Westminster, meanwhile, Google privately confirmed to the Guardian that an HMRC review of its intra-company dealings between operations in the UK, where many sales staff are employed, and Ireland, where UK sales are booked, was ongoing. In fact, it has been ongoing since at least 2010, or 2009 according to the recollection of Google's northern European boss Matt Brittin.

Not only is the investigation still live, but HMRC bosses on Monday confirmed their inquiries had been assisted by piles of documents received, via Hodge and her committee, from an ex-Google staffer turned whistleblower. "We have taken evidence from him and we took it very seriously," said Jim Harra, HMRC head of business tax. Without referring directly to Google, he added: "We always act upon it if there is evidence of non-compliance."

Harra's tone was in contrast to previous commentary from HMRC chief executive Lin Homer, who was unable to appear before MPs. At a hearing in May, however, she had bristled at suggestions from Hodge that the MPs were better able to get to the truth of Google's tax affairs than HMRC. "We see – but sometimes understand more fully – some of the issues that to the general public can look surprising," she told MPs through gritted teeth in May. "That is probably why some of what appears in public, while being known to us, may not lead to the same results that you would expect it to."

On Monday night, Google was still insisting privately that there was nothing in the whistleblower's evidence to suggest the search firm had underpaid UK tax.

Meanwhile, HMRC have clearly decided they want to be seen to be using this new information – but it remains to be seen if it can really help torpedo Google's tax structuring. Don't hold your breath.

Article Source : http://www.guardian.co.uk
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