Margaret Hodge, the former chair of the public accounts committee, said high pay among London staff was further evidence that Google’s “complex structure of companies is a sham”. Its UK employees mainly provide marketing and support services to offices in Dublin.
“This unmasks the reality of their business,” Hodge said. “[Google UK] is not a back office support operation. These are clearly people who are paid a lot because they add value – selling advertising, closing deals and developing new products.”
The UK tax authorities have for years been criticised for accepting Google’s claims that its UK staff do not do business with British advertisers. A £130m settlement reached with HMRC last week effectively made it clear that Google would not be challenged on this point.
Barney Jones, a tax whistleblower who worked for Google’s UK sales team for four years, said Britain was a major profit engine for the US multinational. “They do a lot of high-value sales, marketing and engineering – all out of London. I find it utterly baffling that HMRC accept[s] that these people do almost nothing worthwhile.”
He said staff in London did more specialist work than the 5000 employees in Dublin, many of whom work in contact centres, where they respond to advertisers with email inquiries.
Accounts for 2015 show that Google UK paid wages of £562m over an 18-month period, including £148m in share-based bonuses. Calculated on a pro-rata basis over 12 months, the salary bill works out at an average of £160,000 per head. It was spent on 1,075 marketing staff, 799 staff in research and development, and 455 managers and administrators. Two directors – one based in Dublin, another in the US – did not draw a salary from the UK company.
Accounts for Google UK show that the British unit paid £290m for a plot of land near Kings Cross station in London, where it plans to build a luxury office block to house up to 5,000 workers. Designs including a rooftop were said to have been rejected last year as too “boring”. An additional £14m was paid to extend the development period.
Accounts also make it clear that Google’s controversial £130m settlement with HMRC, which covers a 10-year period, includes interest payments. It is understood that back taxes were about £117m, to which interest of £13m was added.
As reported by the Guardian.