Schmidt defends Google's alleged UK tax dodge

Google’s Eric Schmidt has said his company would pay more tax – if it were required to do so by UK law.

Google is currently under close scrutiny from HMRC following the revelation  that it had only paid £7.3 million in corporation tax last year despite having a UK turnover worth about £3 billion. Other companies have been in the firing line, such as Starbucks and Microsoft, with senior politicians going on record to call the dodges a case of morality.

However, Schmidt’s argument says that it is up to legislators to close loopholes instead of scapegoating individual companies simply working within a system. The Coalition government blustered about closing loopholes but so far little action has been taken – except a recent campaign by HMRC that saw it naming and shaming small traders, while companies like Vodafone escape scrutiny.

This has been the main focus of political action group UK Uncut.

Last week an ex Google employee claimed that the company had managed to “pull the wool” over HMRC by diverting British profits through Ireland to a Bermuda tax haven.

However, Schmidt said the company’s position related to its “fiduciary responsibility to our shareholders”. 

He told BBC Radio 4 that if the tax man wanted to line his pockets there should be a change in the law, declaring: “What we are doing is legal. I’m rather perplexed by this debate, which has been going in the UK for quite some time because I view taxes as not optional. I view that you should pay the taxes that are legally required.”

“If the British system changes the tax laws then we will comply. If the taxes go up we will pay more, if they go down we will pay less. That is a political decision for the democracy that is the UK,” Schmidt said.