The Guardian fails to understand Google’s taxes
A quite wonderful piece of failure here by The Guardian on the subject of Google’s taxes today.
They’ve noticed that Google doesn’t pay very much tax in the UK. OK, fine, but the figures that they then use to illustrate this show that Google might well be paying too much in tax in the UK. No, really:
Google paid just £11.6m in UK corporation tax last year, despite revenues of £506m and a £36.8m profit, according to documents filed at Companies House.
It followed a payment of £6.1m in 2011, for which the company posted a £24.1m loss on a £395m turnover.
They keep changing the corporation tax rate on me but I think it was 26% in the year we’re talking about here. So, if Google made a pre-tax profit of £36.8 million then we’d expect them to pay corporation tax of £9.57 million. But they’ve actually paid £11.6 million….which is, as you’ll note, higher than the headline rate of tax in the UK that year.
What’s more amusing is that if Google really did make a loss the year before then it would have a tax credit for that loss. Meaning that this years’ profits should actually have been the £36.8 million minus that loss last year of £24.1 million or £12.7 million on which tax of £3.3 million would be paid.
Yet they actually paid £11.6 million and everyone’s now complaining?
Seriously, pay too much tax and get bollocked in the newspapers?