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Google paid more than $1 billion in wages and benefits to its UK staff in 2020 but only a fraction of that in corporation tax

Google paid more than $1 billion in wages and benefits to its UK staff in 2020 but only a fraction of that in corporation tax

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Google shelled out more than £1.2bn ($1.6 billion) on its UK workforce last year but paid just a fraction of that in corporation tax.

Staff at the tech giant received £508.9 million ($709 million) in stock-based payments alone in 12 months to the end of June 2020, according to its latest account filings.

By contrast, Google UK paid £50.4 million ($70 million) in tax during the same period, a £6 million ($8 million) increase on the previous year.

Revenue at Google’s UK entity was up by around 13% to £1.8 billion ($2.5 billion), up from £1.6 billion ($2.2 billion), while pre-tax profits rose by just over a fifth to £277 million ($386 million).

Google is one of a batch of tech platforms under fire for its tax arrangements.

Although the company makes billions of pounds in sales in the UK and hires thousands of staff locally, it recognizes its profits through entities based in other, low-tax jurisdictions.

Though not illegal, this profit-shifting is under growing scrutiny from governments and regulators who want the tech giants to fork out more tax in markets where they operate. President Joe Biden’s administration earlier this month proposed a global minimum corporation tax rate of 21%, which could have a significant impact on tech firms.

A Google spokeswoman said: “Our global effective income tax rate over the past decade has exceeded 20% of our profits, in line with average statutory tax rates. Approximately 80% of that tax has been due in the United States, where Google was founded and where most of our products are developed.

“We have long supported efforts via the OECD to update international tax rules to arrive at a system where more taxing rights are allocated to countries where products and services are consumed.”

The tech giant increased its headcount in the UK by more than 500 people to 5,124 during the period. The hiring marked a modest slowdown from the previous year, when the firm onboarded almost 800 new staff.

Wages and salaries accounted for £577.8 million ($800 million) of Google’s £1.2 billion ($1.6 billion) staffing costs. The rest comprised pensions, social security, and the £508.9 million ($709 million) in stock-based payments.

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