Google pays £44m in UK corporation tax and hands £1bn to staff, accounts show

Google paid £44 million in corporation tax in the UK last year, and handed out more than £1 billion in pay and bonuses to its 4,439 staff in the country, according to accounts filed with Companies House.

The tax payment is down on the £66 million paid a year earlier, due to profits falling following a hiring spree of 800 workers, including 400 new research and development (R&D) staff.

Google’s UK operation is primarily used as the marketing and sales division of its European operation, which is headquartered in Dublin, where taxes are lower.

The Government is attempting to crack down on the use of profits and cash being shifted to countries with lower tax levels, and is planning a 2% digital service tax.

If introduced, Google would see 2% of its £1.6 billion sales in the UK taxed, bringing in an extra £32 million. Sales were up compared with £1.4 billion recorded a year earlier.

Instead, it paid the £44 million bill on pre-tax profits of £225.8 million, down on £246.3 million pre-tax profits the year before.

Pay to staff has always been high for Google, but the wage bill was up 25% in the past year according to the accounts, with £441 million worth of shares handed out in bonuses.

The company said it is “committed to the recruitment and retention of first-rate people, and therefore offers a highly competitive compensation and benefits package”.

The accounts also showed the company’s new King’s Cross office in London, which it owns on a long lease, was worth £290 million as of June last year.