Former executive accuses Google of ‘immoral’ tax avoidance scheme

A former Google executive has accused the company of cheating the taxpayer out of hundreds of millions of pounds. Barney Jones claims the firm has been running an "immoral" tax avoidance scheme for the past decade.

The 34-year-old, who worked at the company between 2002 and 2006, made his allegations to The Sunday Times.

"The real victims are ordinary taxpayers in Britain who are being cheated by Google," he told the paper.

"They don't have the means to hire accountants to pretend they make their money in Ireland, Bermuda or the British Virgin Islands.

"What Google is doing is immoral."

The allegations come days after MPs described the internet giant's tax operation as "devious, calculated and unethical".

Matt Brittin, the company's vice president, was grilled by MPs on the Public Accounts Committee (PAC) on Thursday over its payment of just £6m in British corporation tax in 2011.

The firm generated more than £3bn in revenue that year, but claims its UK transactions actually take place in Ireland where the corporate tax rate is significantly lower.

But MPs reacted with incredulity to claims that the company did not carry out advertising sales in the UK and accused the firm of "deliberately manipulating the reality of their business".

Google has always strongly denied any wrongdoing - and Mr Brittin insisted the company complied "fully" with tax laws.

However, Jones told The Sunday Times: "It uses a concocted scheme to avoid tax. It's a smoke-screen to distort where the substance of its economic activity is really taking place."

Of his claims, Google said in a statement: "It is difficult to respond fully to documents we have not seen.

"These questions relate to Google's business in the UK going back a decade or more and don't change the fact that Google pays the corporate tax due on its UK activities and complies fully with UK law."

The controversy comes before Google executive chairman Eric Schmidt is due to meet Prime Minister David Cameron at Downing Street on Monday.

Writing in the Observer, the executive has given his first reaction to last week's criticism of his company by MPs on the public accounts committee.

He said tax avoidance is rightly a "hot topic" in difficult economic times and urges genuine reform, but added: "Politicians - not companies - set the rules."

Schmidt is also expected to attend a Google event in Hertfordshire on Wednesday where Labour leader Ed Miliband is due to speak.

Miliband has pledged new rules to tackle corporate tax dodgers if he wins the next election.