Has Google ‘paid its dues?’

No prizes for guessing what we are referring to here! Of course it is the tax payment issue (or seemingly lack of it.)

HMRC have been investigating the tax whereabouts of Google for over 5 years now, and in the end Google has decided to pay over £130 million in taxes which date back as far as 2005!

Naturally there are arguments for and against this ‘conclusion’ to the matter. The government argue that it is actually a great deal that will rebalance tax revenue back into the economy. Others argue that the figure is far too low (some even go as far as insulting.) At the moment it does seem the ‘nay’ voice appears to be shouting the loudest. Infact, research has been done (which we know could be a little skewed) showing that this is actually a very small part of tax on the overall total profit – it is claimed that the payment should be as much as 10 times the amount that was agreed.

What is the effect of this issue?

As far as Google is concerned, the main thing here is down to reputation and image – afterall Google is such a vast, well known and household named company, it must be seen to be doing the correct thing – or at least that’s what we would think and hope!

Google would argue that they have done nothing illegal. Immoral maybe yes, but not illegal. In that, Google would cite in its defence that actually the system is in the wrong rather than them.

The real question on this is do big companies like Google have a moral aswell as legal responsibility? The answer is probably yes (think about it – if ordinary people and small businesses have to pay tax why does a vast company not?…) so therefore the possibility of Google even being vaguely aware that the practice was not squeaky clean is enough to tarnish the reputation in at least some people’s eyes.

Google would now argue that things have started to change so even the ‘moral responsibility’ is now being taken care of aswell. They would cite the £130 million payment as a good gesture towards this, along with other measures which have since been put in place including:

* Making sure that more sales are registered in Britain (rather than Ireland.)

* Increasing the amount of tax paid on the above sales etc.

Whilst this is all well and good, is it too little too late? We already know that many more companies participate in these so called tax avoidance schemes and whilst Google can’t be responsible for those, its own involvement in such activity surely must taint its reputation?

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