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| Google tax: David Cameron defends £130m UK tax deal | Google tax: David Cameron defends £130m UK tax deal |
| (35 minutes later) | |
| David Cameron has defended the deal UK authorities have struck with Google over tax, saying the Conservatives have done more than any other government. | David Cameron has defended the deal UK authorities have struck with Google over tax, saying the Conservatives have done more than any other government. |
| The PM told the Commons the tax "should have been collected under [the last] Labour government". | The PM told the Commons the tax "should have been collected under [the last] Labour government". |
| Google agreed to pay back £130m of tax dating back to 2005 to HMRC, which said it was the "full tax due in law". | Google agreed to pay back £130m of tax dating back to 2005 to HMRC, which said it was the "full tax due in law". |
| But European MPs have described it as a "very bad deal", and Labour said it amounted to a 3% tax rate. | But European MPs have described it as a "very bad deal", and Labour said it amounted to a 3% tax rate. |
| Mr Cameron was challenged during Prime Minister's Questions about the amount of tax paid by the US tech giant, which has made billions of pounds of sales in Britain. | Mr Cameron was challenged during Prime Minister's Questions about the amount of tax paid by the US tech giant, which has made billions of pounds of sales in Britain. |
| 'Crack down' | 'Crack down' |
| He said: "We're talking about tax that should have been collected under a Labour government, raised by a Conservative government. | He said: "We're talking about tax that should have been collected under a Labour government, raised by a Conservative government. |
| "It's quite right this is done independently by HMRC (HM Revenue and Customs), but I'm absolutely clear that no government has done more than this one to crack down on tax evasion and aggressive tax avoidance. No government and certainly not the last Labour government." | "It's quite right this is done independently by HMRC (HM Revenue and Customs), but I'm absolutely clear that no government has done more than this one to crack down on tax evasion and aggressive tax avoidance. No government and certainly not the last Labour government." |
| But Labour leader Jeremy Corbyn told the Commons the deal equated to a tax rate of 3%. | But Labour leader Jeremy Corbyn told the Commons the deal equated to a tax rate of 3%. |
| Labour's shadow chief secretary to the Treasury Seema Malhotra has written to the National Audit Office asking it to investigate HMRC's handling of the Google tax settlement. | |
| Live updates: PMQs reaction | Live updates: PMQs reaction |
| PMQs: Labour attacks PM's 'bunch of migrants' comment | PMQs: Labour attacks PM's 'bunch of migrants' comment |
| Former Business Secretary Vince Cable said Google had "got off very, very lightly", and the chancellor had "made a fool of himself" by hailing the deal as a victory. | |
| Meanwhile, the vice-chairwoman of a European tax committee said the deal showed the UK was preparing "to become a kind of tax haven to attract multinationals". | Meanwhile, the vice-chairwoman of a European tax committee said the deal showed the UK was preparing "to become a kind of tax haven to attract multinationals". |
| French MEP Eva Joly said the settlement was "bad news for everybody" and told BBC Radio 4's Today programme that MEPs would call Chancellor George Osborne to appear before them. | French MEP Eva Joly said the settlement was "bad news for everybody" and told BBC Radio 4's Today programme that MEPs would call Chancellor George Osborne to appear before them. |
| She said it was difficult to know on what basis the figure was reached and she criticised the attempt to "make publicity out of it" by talking about large-sounding figures which she said were a fraction of what should be paid. | She said it was difficult to know on what basis the figure was reached and she criticised the attempt to "make publicity out of it" by talking about large-sounding figures which she said were a fraction of what should be paid. |
| Ms Joly, who is vice-chairwoman of the Special European Parliamentary Committee on Tax Rulings, said: "We will ask him [Mr Osborne] to come and explain and I hope he will." | Ms Joly, who is vice-chairwoman of the Special European Parliamentary Committee on Tax Rulings, said: "We will ask him [Mr Osborne] to come and explain and I hope he will." |
| Why has Google proved so politically taxing? | Why has Google proved so politically taxing? |
| By political correspondent Ross Hawkins | By political correspondent Ross Hawkins |
| First, George Osborne risked sounding far too content when he hailed the deal as a "victory" and a "major success". Government spokesmen were reluctant to repeat his verdict. | First, George Osborne risked sounding far too content when he hailed the deal as a "victory" and a "major success". Government spokesmen were reluctant to repeat his verdict. |
| Second, Labour reacted quickly and managed to get a hearing. Their message sounded louder than their internal disputes, for a change. | Second, Labour reacted quickly and managed to get a hearing. Their message sounded louder than their internal disputes, for a change. |
| Third, voters care. The perception that international firms get a better deal than ordinary people is toxic. | Third, voters care. The perception that international firms get a better deal than ordinary people is toxic. |
| It is HMRC that collects tax, not ministers, and the government says it has acted and got results where Labour did not. | It is HMRC that collects tax, not ministers, and the government says it has acted and got results where Labour did not. |
| But few politicians ever caught the mood of a nation declaring themselves happy with a big business's tax return. | But few politicians ever caught the mood of a nation declaring themselves happy with a big business's tax return. |
| Mr Osborne has already faced criticism from some politicians in the UK over the tax deal. Shadow chancellor John McDonnell has written to him demanding details of how the settlement was reached. | Mr Osborne has already faced criticism from some politicians in the UK over the tax deal. Shadow chancellor John McDonnell has written to him demanding details of how the settlement was reached. |
| And Conservative MP Mark Garnier, a member of the Treasury select committee, said the agreement represented a "relatively small" amount of money compared with Google's UK profits. | And Conservative MP Mark Garnier, a member of the Treasury select committee, said the agreement represented a "relatively small" amount of money compared with Google's UK profits. |
| News Corporation chairman Rupert Murdoch tweeted to say he believed the company was only paying "token amounts for PR [public relations] purposes". | News Corporation chairman Rupert Murdoch tweeted to say he believed the company was only paying "token amounts for PR [public relations] purposes". |
| "Won't work. Need strong new laws to pay like the rest of us," he wrote. | "Won't work. Need strong new laws to pay like the rest of us," he wrote. |
| Reports in Wednesday's Times newspaper say Italy is poised to strike a far tougher tax deal with Google than the UK's. It refers to stories in Italian media that suggest Google will pay £113m in back taxes to the Italian government, equating to a 15% tax rate. | Reports in Wednesday's Times newspaper say Italy is poised to strike a far tougher tax deal with Google than the UK's. It refers to stories in Italian media that suggest Google will pay £113m in back taxes to the Italian government, equating to a 15% tax rate. |
| The deal has not yet been completed so it is not known how many years it covers. | The deal has not yet been completed so it is not known how many years it covers. |
| The Italian finance minister can also expect a call to appear before the MEPs, Ms Joly said. | The Italian finance minister can also expect a call to appear before the MEPs, Ms Joly said. |
| Multinationals | Multinationals |
| Google agreed to pay the back taxes after an "open audit" of its accounts by the UK tax authorities and a six-year inquiry by HMRC. | Google agreed to pay the back taxes after an "open audit" of its accounts by the UK tax authorities and a six-year inquiry by HMRC. |
| Despite the UK being one of Google's biggest markets, it paid £20.4m in taxes in 2013. The value of its sales in Britain that year was £3.8bn. Google makes most of its UK profits through online advertising here. | Despite the UK being one of Google's biggest markets, it paid £20.4m in taxes in 2013. The value of its sales in Britain that year was £3.8bn. Google makes most of its UK profits through online advertising here. |
| The company has been criticised for its legal but complex international tax structures. | The company has been criticised for its legal but complex international tax structures. |
| Its European headquarters are in Ireland, which has a lower corporation tax rate than the UK, and it has also used company structures in Bermuda. | Its European headquarters are in Ireland, which has a lower corporation tax rate than the UK, and it has also used company structures in Bermuda. |
| Senior figures at the company said it would follow new rules which would see it pay more taxes in future. | Senior figures at the company said it would follow new rules which would see it pay more taxes in future. |
| Head of Google Europe Matt Brittin said last week: "We were applying the rules as they were and that was then and now we are going to be applying the new rules, which means we will be paying more tax." | Head of Google Europe Matt Brittin said last week: "We were applying the rules as they were and that was then and now we are going to be applying the new rules, which means we will be paying more tax." |