A former employee of Google Inc (NASDAQ:GOOG) in its office in the United Kingdom revealed the tax avoidance scheme of the search engine giant, according to a report of Simon Duke and Jon-Ungoed Thomas of The Sunday Times.
Barney Jones, a former manager of a small team at Google Inc (NASDAQ:GOOG) who dealt with advertisers from 2002 to 2006 described the search engine giants tax avoidance scheme is “immoral.”
When asked about the claims of Google Inc (NASDAQ:GOOG) that its advertising deals were not closed in United Kingdom, Jones said that it was a “complete lie.”
During an interview with Thomas, Jones explained that his sales team in London negotiated and signed contracts to British advertisers. “We were an advertising sales team. We recruit the UK sales team. Our job was to find advertisers, to respond to them, to talk to them how Google works…to close deals, to get them to sign bits of paper saying that they were committing to spend in UK,” said Jones.
According to him, closing deals is a terminology used by his team, however the billing for the transactions will come Google Inc (NASDAQ:GOOG)’s office in Ireland. However, he emphasized, “No normal understanding as the word sale or closing a sale would be associated with what was going in Ireland that was all happening UK.
Jones believe that Google Inc (NASDAQ:GOOG) funneled its profits in the United Kingdom directly to Ireland. He said, “We we’re signing up clients, they were spending money with Google, that money was being passed through…you know, the Irish company that Google set up.”
In addition, Jones said that he felt that Google Inc (NASDAQ:GOOG) has gone astray and voided paying taxes by channeling its profits in UK to Ireland. According to him, the search engine giant is not paying its fair share of taxes in UK. He also said that he felt sorry because he did fail to fully understand what’s going on with the advertising deal during his tenure with the company.
“I’m sorry for the part, to be honest. Perhaps, I should have paid more attention to make sure I understood at the time.”
Jones submitted his testimony to the Commons Public Accounts Committee (PAC), and he is ready to give a cache of more than 100,000 e-mails and documents to the HM Revenue & Customs (HMRC) that would give a clear picture of the scheme.
Last week, Matt Brittin, vice president of Google Inc (NASDAQ:GOOG) admitted to the PAC that its London office did many of the selling aspects, but the transactions were closed by its staff based in Ireland.
Peter Barron, Google’s director of external relations, said: “As we said in front of the Public Accounts Committee, it is difficult to respond fully to documents we have not seen. These questions relate to Google’s business in the UK going back a decade or more. None of the allegations put to us change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law.”
On the other hand, Margaret Hodge, chairperson of the PAC called the search engine giant’s aggressive accounting strategy as “evil, devious, and unethical.”