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Google UK revenue soars in fourth quarter Don’t tell the taxman, but Google revenues will soon beat the BBC’s
(about 11 hours later)
UK revenues jumped 15.5 per cent to $5.6 billion (£3.6bn) last year as the Internet giant’s advertising business continued to accelerate. Google’s UK revenues last year came within a whisker of the entire BBC licence fee as online advertising surged, putting yet more pressure on the US company over its relatively low levels of UK corporation tax.
Revenues in Britain, the company’s second-biggest market outside the US, accelerated from $4.85 billion in 2012. Google recorded its best UK quarter in the final three months of the year, with turnover hitting $1.5 billion. Sales in the UK leapt 15.5 per cent in 2013 to $5.6bn (£3.4bn), just shy of the £3.65bn raised during the year from the licence fee, highlighting how the online search engine is rapidly rising in the financial power league of British media. Britain is Google’s second-biggest market outside the US and it recorded its best-ever quarter here in the final three months of 2013 as revenue hit $1.5bn.
The 2013 total means that Google’s turnover is almost as big as the haul from the BBC licence fee, which reached £3.65 million last year. News of Google’s soaring revenues, the bulk of which come from advertising, will heap further pressure on the company over its tax arrangements. Despite its huge revenues, Google paid just £11.2m in corporation tax here in 2012. The company pays all its taxes legally but books most of its UK takings through its Irish business, so avoiding UK corporation taxes.
News of Google’s soaring revenue, the bulk of which comes from advertising, will heap further pressure on the company over its tax arrangements. Despite its huge revenues, Google’s UK operation last year paid just £11.2 million in corporation tax. John Mann, a Labour MP and member of the influential Treasury Select Committee, told The Independent yesterday: “Google has a massive turnover, but along with other corporations continues to scheme to avoid paying its fair share of tax. Google’s mantra is ‘don’t be evil’ – but companies need to consider the customers they rely on. At a time of wage stagnation and welfare cuts, does ‘evil’ mean illegal for Google, or should it consider a more relative concept of fairness and accountability?”
The company was slammed as “devious, calculated and unethical” by the chairman of the Commons Public Accounts Committee, the Labour MP Margaret Hodge, when UK chief Matt Brittin appeared before the committee last year. Margaret Hodge, who chairs the Public Accounts Committee, last year condemned Google’s UK tax arrangements as “devious, calculated and unethical” when the company’s UK chief, Matt Brittin, appeared before MPs.
Google pays all its taxes legally but books most of its UK sales through Ireland, avoiding corporation tax. The most recent accounts for Google UK reveal that its shares-based staff compensation scheme is also under scrutiny from HM Revenue and Customs. The company has set aside £24m to cover potential historical corporation tax on the scheme, dating back to 2005, arising from the taxman’s investigation.
Google employs close to 2,000 people in the UK with offices in Covent Garden, Victoria and Manchester. The search giant is currently spending  £650 million on building a new UK headquarters in King’s Cross. Details of how much corporation tax Google paid in 2013 will not be available until Google UK files its annual accounts later this year.
The company’s $5.6 billion revenue was revealed in its fourth-quarter results, announced last night. Globally, Google’s revenue rocketed 17 per cent to $16.86 billion, but losses at its Motorola arm, which it sold to the Chinese company Lenovo on Wednesday, weighed on earnings, pushing it to a loss of  $384 million for the quarter. Google said: “Like most multinationals, we pay the bulk of our £1.2bn corporate tax bill where our business originated, in our case the US. We’re also a significant contributor to the UK economy, having created over 2,000 jobs.”
Google chief executive Larry Page said: “We ended 2013 with another great quarter of momentum and growth.” However, losses at the internet giant’s Motorola arm, which it has just agreed to sell to Lenovo, weighed on earnings, pushing it to a loss of $384m in the quarter.
Amazon, another US technology giant whose British tax arrangements have been criticised, also reported its fourth- quarter numbers. Sales rose 20 per cent to $25.59 billion, while the online retailer made a profit of $239 million.
Amazon’s UK arm had its best ever sales day on December 2, “Cyber Monday’, when 4.1 million items were ordered at a rate of 47 items a second.
AIM-listed Top Level Domain Holdings has raised £21 million to bid against the likes of Google and Amazon for new internet domain names.
The company, which is renaming itself Minds + Machines, is bidding for 43 domains including .app, .yoga, .wedding and .gay.