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Ed Miliband: Google must pay more in UK taxes Ed Miliband: Google must pay more in UK taxes
(about 4 hours later)
Labour leader Ed Miliband will criticise Google's tax arrangements when he speaks at an event organised by the internet search giant. Ed Miliband has criticised Google's tax arrangements at an event organised by the internet search giant.
The company's UK sales are worth £3.2bn, but most are routed through Ireland, meaning it paid £6m in corporation tax in 2011. The Labour leader said the firm had gone to "extraordinary lengths" to limit levels of tax it paid in the UK.
Mr Miliband will accuse Google of going to "extraordinary lengths" to avoid making payments to the Treasury. Despite UK sales worth £3.2bn, the firm paid £6m in corporation tax in 2011.
He will urge the firm to stick to its "great founding principles". Mr Miliband likened the culture of big internet firms to the banks prior to the 2008 crash and said Labour would be prepared to bring in rules in the UK to increase transparency and disclosure.
Google is one of several multinational companies which have been strongly criticised for organising their tax affairs in ways that minimise the amounts they pay in the UK. Google, most of whose UK profits are routed through Ireland, is one of several multinationals strongly criticised for organising their tax affairs in ways that minimise the amounts they pay in the UK.
David Cameron will later urge EU leaders to back global action against tax evasion and "aggressive" tax avoidance that is causing nations "staggering" losses.
The prime minister is meeting his European counterparts in Brussels to discuss ways of cracking down on those who do not pay their fair share.
He has also said he will raise the issue at the G8 summit next month.
'Don't be evil'
Google's executive chairman Eric Schmidt has insisted the company "has always aspired to do the right thing", adding that "international tax law could almost certainly benefit from reform".Google's executive chairman Eric Schmidt has insisted the company "has always aspired to do the right thing", adding that "international tax law could almost certainly benefit from reform".
Mr Miliband, speaking at the Google Big Tent event in Hertfordshire, will say: "In Google's 2004 IPO prospectus, it said: 'Don't be evil. We will be stronger in the long term, we will be better served - as shareholders and in all other ways - by a company that does good things for the world, even if we forego some short-term gains. This is an important aspect of our culture and is broadly shared in the company.' 'Don't be evil'
"Your employees want a culture where they feel they are doing the right thing. Your customers want it too." David Cameron is in Brussels on Wednesday to urge EU leaders to back global action against tax evasion and "aggressive" tax avoidance in the run-up to next month's G8 summit.
The Labour leader will add: "Our economy needs proper tax revenues to pay down the deficit and fund the services upon which we all rely. Our society depends on the right messages being sent out from the top. And the reputation of business depends on the most prominent businesses doing the right thing. Mr Miliband, speaking at the Google Big Tent event in Hertfordshire, said that the prime minister was "wrong" not to discuss the issue of tax reform with Mr Schmidt at a Downing Street reception earlier this week.
"I can't be the only person here who feels disappointed that such a great company as Google, with such great founding principles, would be reduced to arguing that when it employs thousands of people in Britain, makes billions of pounds of revenue in Britain, but pays just a fraction of that in tax. Citing Google's founding principle "don't be evil" and its commitment to act in the public good at the expense of short-term financial gain, Mr Miliband said its employees and customers all expected it to do the "right thing".
"So when Google does great things for the world, as it does, I applaud you. And when Google goes to extraordinary lengths to avoid paying its taxes, I think it's wrong." However, he expressed concerns about the culture of Google and other digital firms when it came to their attitudes to tax.
'Right laws' He said: "I can't be the only person who feels deeply disappointed that a great company like Google, with great founding principles, should be reduced to arguing that when it employs thousands of people in Britain, makes billions of pounds in revenue in Britain, it is fair that it should pay just a fraction of 1% of that in tax.
Mr Miliband will repeat his promise of a more "responsible capitalism", adding that he wants to "engage with" the firm over taxes. "So when Google does great things, I will praise you...But when Google goes to extraordinary lengths to avoid paying its taxes, I say it's wrong."
He will say: "We welcome Google's call for international tax reform. This is what Labour supports to ensure transparency, proper rules on transfer pricing and a crackdown on tax havens. 'Crazy rules'
"The government should be putting forward proposals now to make this happen at the G8 and, if we cannot get international agreement, a Labour government will act here at home. But the right laws must also be accompanied by the responsibility of firms." Mr Miliband welcomed the US internet giant's support for international tax reform and said action was needed to crack down on tax havens and "crazy rules" allowing companies to transfer profits from one country to another to minimise tax liabilities.
"The first and primary responsibility of the government to set the right laws," he said.
At the weekend Mr Miliband said he would pursue a global system where multinationals must publish their revenues, profits and other key corporate information in each country in which they operate.At the weekend Mr Miliband said he would pursue a global system where multinationals must publish their revenues, profits and other key corporate information in each country in which they operate.
Google's executive chairman Eric Schmidt will also speak at Wednesday's event. The Labour leader said the prime minister had failed to "put concrete proposals on the table" and a future Labour government would be willing to act "on its own at home if we don't get an international agreement".
He said he did not believe firms would choose to relocate because they had to sign up to "basic rules on transparency".
Google's executive chairman Eric Schmidt will also speak at Wednesday's event but was not present to listen to Mr Miliband.