Google has reached an agreement to pay £130 million under a deal with the HMRC UK to cover taxes since 2005.
Google will also start to pay tax “based on revenue from UK-based advertisers, which reflects the size and scope of our UK business”.
Meg Hillier, the chairwoman of the Common’s Public Accounts Committee (PAC) is to call Google and HMRC figures before MPs to explain the deal, which she said showed HMRC “admitting it pulled in too little tax from Google for nine out of 10 years”.
The issue of how much tax UK multinational firms such as Starbucks, Amazon and Facebook pay in the UK has hit the headlines.
According to the HMRC spokesman: “The successful conclusion of HMRC inquiries has secured a substantial result, which means that Google will pay the full tax due in law on profits that belong in the UK. Multinational companies must pay the tax that is due and we do not accept less.”
However Labour MP Mrs Hillier said the PAC would be examining the deal. On this treasury minister, David Gauke said: “The Google tax bill dates back to the middle of the last Labour government, which did absolutely nothing about it. Yet again it is this government that is sorting out the mess.
“For Labour to complain now is at best selective amnesia and at worst shameless hypocrisy. “Of course, the details of the payment HMRC has agreed can now be examined by the National Audit Office.”