Don't hate the player... Google just plays it well

You can't blame companies for paying the smallest amount of tax they can.

 

Does tax avoidance count as evil? Stingy, yes. Tight fisted, certainly. Unfair, perhaps. Illegal, apparently not. But evil is a difficult word to define. Google’s unofficial strap line has always been “Don’t be evil” but this is getting harder and harder to take seriously.

Google’s executive chairman Eric Schmidt has defended his company’s meagre tax on its UK earnings by saying that Google's behaviour reflected the way all big international companies manage their taxes.

The question of whether our morality is decided by common practise is a question for another day and one with, arguably, no real answer. 

The problem that Google faces is whether or not it should be paying the smallest amount of tax it can. Ask any private person in UK if they would ever voluntarily pay more tax that they are required to do and they probably wouldn’t even understand the question, it’s that daft. You pay what you have to nothing more. Then you claim back everything you can and try and get some tax credits while you’re at it.

Google is doing the same. The problem here is that Google is having to defend its self when it’s the system that’s broken, not the company. Here’s (a very brief) explanation how Google, and for that matter any of the other multinationals who were criticised for supposed tax dodging, do business within the EU.

The company (which ever one it is) has offices all over the EU. Each of these offices carries out a particular role for the company. The sales of the company happen within one particular country (in Google’s case from Ireland) and the corporate tax is paid in the country where the sale takes place.

This is how the EU market is meant to work, making it as easy as possible for businesses to sell their products or services around the EU.

Anyone angry at Google for paying this amount of tax in the UK must consider how this legal form of tax avoidance came about. If the system allows for this to happen then it is not the fault of the people or companies within the system when it does. The system has to change; companies (especially multinational corporates) aren’t going to change on their own but will if the laws require them to.

As the saying goes: don’t hate the player, hate the game. Google is just playing it well.

Photograph: Getty Images

Billy Bambrough writes for Retail Banker International at VRL financial news.
 

Photo: Getty Images
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What do Labour's lost voters make of the Labour leadership candidates?

What does Newsnight's focus group make of the Labour leadership candidates?

Tonight on Newsnight, an IpsosMori focus group of former Labour voters talks about the four Labour leadership candidates. What did they make of the four candidates?

On Andy Burnham:

“He’s the old guard, with Yvette Cooper”

“It’s the same message they were trying to portray right up to the election”​

“I thought that he acknowledged the fact that they didn’t say sorry during the time of the election, and how can you expect people to vote for you when you’re not actually acknowledging that you were part of the problem”​

“Strongish leader, and at least he’s acknowledging and saying let’s move on from here as opposed to wishy washy”

“I was surprised how long he’d been in politics if he was talking about Tony Blair years – he doesn’t look old enough”

On Jeremy Corbyn:

"“He’s the older guy with the grey hair who’s got all the policies straight out of the sixties and is a bit of a hippy as well is what he comes across as” 

“I agree with most of what he said, I must admit, but I don’t think as a country we can afford his principles”

“He was just going to be the opposite of Conservatives, but there might be policies on the Conservative side that, y’know, might be good policies”

“I’ve heard in the paper he’s the favourite to win the Labour leadership. Well, if that was him, then I won’t be voting for Labour, put it that way”

“I think he’s a very good politician but he’s unelectable as a Prime Minister”

On Yvette Cooper

“She sounds quite positive doesn’t she – for families and their everyday issues”

“Bedroom tax, working tax credits, mainly mum things as well”

“We had Margaret Thatcher obviously years ago, and then I’ve always thought about it being a man, I wanted a man, thinking they were stronger…  she was very strong and decisive as well”

“She was very clear – more so than the other guy [Burnham]”

“I think she’s trying to play down her economics background to sort of distance herself from her husband… I think she’s dumbing herself down”

On Liz Kendall

“None of it came from the heart”

“She just sounds like someone’s told her to say something, it’s not coming from the heart, she needs passion”

“Rather than saying what she’s going to do, she’s attacking”

“She reminded me of a headteacher when she was standing there, and she was quite boring. She just didn’t seem to have any sort of personality, and you can’t imagine her being a leader of a party”

“With Liz Kendall and Andy Burnham there’s a lot of rhetoric but there doesn’t seem to be a lot of direction behind what they’re saying. There seems to be a lot of words but no action.”

And, finally, a piece of advice for all four candidates, should they win the leadership election:

“Get down on your hands and knees and start praying”

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.