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Google's £130m tax settlement 'disproportionately small'

Credit: PA

Google's £130 million tax settlement "seems disproportionately small", the influential Public Accounts Committee investigating the deal has said.

MPs said there was "palpable" public anger at the agreement with HMRC to cover taxes due over the past decade.

The committee said the settlement "seems disproportionately small when compared with the size of Google's business in the UK, reinforcing our concerns that the rules governing where corporation tax is paid by multinational companies do not produce a fair outcome".

Google has insisted it pays a "fair" amount of tax and Chancellor George Osborne previously hailed the deal a "victory".

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HMRC tells MPs: We wanted to fine Google over tax

HMRC Chief Executive Dame Lin Homer. Credit: PA

HMRC has told MPs it wanted to fine Google over their tax affairs - but could not prove their accounts were assembled with "insufficient care".

Earlier Google finance boss Tom Hutchinson said HMRC determined they had a "reasonable argument" for the amount of UK profit they declared.

"And that's why there was no penalty," he added.

Google insists £130 million UK tax deal is 'fair'

Google finance boss Tom Hutchinson insisted the deal was 'fair'. Credit: HoC

Google has insisted the £130 million UK tax deal with HMRC is "fair".

The company's finance boss Tom Hutchinson said the figure was the largest tax settlement following an audit ever paid by Google outside the US.

He added the firm had not incurred any fines because HMRC determined they had a "reasonable argument" for the amount of profit they were showing.

"HMRC looks and sees, are we just ignoring the rules? Or did we interpret the rules in a reasonable way?" he said.

"And they determined we did, and that's why there was no penalty."

Google bosses accused of 'living on a different planet'

Google's finance boss Tom Hutchinson and UK boss Matt Brittin. Credit: HoC

Google bosses were today accused of "living on a different planet" as they were grilled by MPs over their controversial UK tax deal.

Committee chair Meg Hillier asked Google UK boss Matt Brittin: "You're British, you're a British taxpayer. So don't you feel a bit embarrassed by this?

"The fact that you don't even know what you're paid? You're living on a different planet.

"Frankly, you are taxing my patience and the patience of the hard-working taxpayer out there."

Mr Brittin said: "I'm proud to be British. I appear here because I believe in the process of democracy."

But he insisted Google were paying the right tax in the UK: "It's not 3%, it is 20%."

Google's finance boss Tom Hutchinson added the £130 million deal was "fair" and said it was the biggest settlement they had agreed outside the US.

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