An increasing number of politicians are calling on Chancellor George Osborne to defend HM Revenue and Custom’s deal with Google over the amount of back-tax to be paid to the UK.

The deal, agreed last week after an “open audit” of Google’s accounts by the UK tax authorities, stands at £130 million and covers payment owed since 2005. However, many politicians have called that amount into question, suggesting that for the size and prominence of Google, it is a “very small number”.

European MPs have now entered the fray, demanding that Osborne explain how the figure was reached. French MEP Eva Joly said the settlement was “bad news for everybody”, and accused the UK of making itself into “a kind of tax haven to attract multinationals”.

HMRC has defended the deal, with a senior official insisting that it was collecting the “full tax due in law”.

Google is one of several multinational companies to be have been accused of avoiding tax, in spite of making billions of pounds of sales in Britain. Osborne has made moves to cut down on tax avoidance of multi-national companies, but has recently come under fire for this himself, after claims made in November that his family firm Osborne and Little, started by his father Sir Peter Osborne, has paid no UK corporation tax for seven years.

27/01/2016