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Google strikes £130m deal with UK over controversial tax arrangement

23Google has struck a £130 million deal with the taxman to pay money it has owed for the past 10 years.
The internet giant said it had reached an agreement with HM Revenue and Customs covering taxes since 2005.
It means Google will start to pay tax “based on revenue from UK-based advertisers, which reflects the size and scope of our UK business”, the firm added.
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The move comes after years of criticism of Google and other multinational firms over their tax arrangement in the UK and across Europe.
Meg Hillier, the chairwoman of the Common’s Public Accounts Committee (PAC) will call Google and HMRC figures before MPs to explain the deal, which she said showed HMRC “admitting it pulled in too little tax from Google for nine out of 10 years”.
A Google spokeswoman said: “We have agreed with HMRC a new approach for our UK taxes and will pay £130 million, covering taxes since 2005.”
She added: “The way multinational companies are taxed has been debated for many years and the international tax system is changing as a result. This settlement reflects that shift and is in line with recent OECD guidance.”
The issue of how much UK tax multinational firms like Google, Amazon and Facebook pay in the UK has hit the headlines in recent years, with HMRC indicating back in October 2013 that it was looking into Google’s accounts.
In March’s Budget Chancellor George Osborne announced the introduction in April of a so-called “Google tax” targeting firms that move their profits overseas.
The “diverted profits tax” is designed to discourage large companies from taking earnings out of the UK to avoid tax.
An HMRC spokesman said: “The successful conclusion of HMRC inquiries has secured a substantial result, which means that Google will pay the full tax due in law on profits that belong in the UK. Multinational companies must pay the tax that is due and we do not accept less.”