Here’s Eric Schmidt, chairman of Google owner Alphabet, now the biggest company in the world by market cap at $535bn, chatting up David Cameron at a soiree in 2012.
No idea what they’re talking about but I bet it wasn’t Google’s labyrinthine tax arrangements which see the company (under its new ‘above-the-board’ deal in the UK) paying £46m in tax on £5bn of revenue. Google employs wheezes like the ‘double Irish’ and the ‘Dutch sandwich’ to route its profits through Bermuda, where it doesn’t seem to employ anyone.
If an individual or most companies tried to persuade a judge (or even HMRC) that their ‘intellectual property’ resided behind a name plate on a Bermudan lawyer’s office they’d be lucky not to be done for contempt of court.
But who’s that peering at the gilded duo? Could it be Google’s fabled ‘frenemy’ Sir Martin Sorrell? At least Martin pays his taxes, as far as we know.
One rather important group to have escaped much scrutiny, so far, in all this alleged tax dodging are the big accountancy firms. Not so long ago partners were popping up all over the place (generally ones with reassuring provincial accents) to chat away about tax and business in general. But the beanies seem to be be keeping their heads down – no wonder.
Interestingly Google’s auditor EY (formerly Ernst & Young) looks after those other digital gatekeepers Apple and Facebook – neither of whom are very keen on paying tax either. When such companies have to cough up back taxes – which, we hope, they all will – shouldn’t their auditors be made to pay a penalty too?