Alphabet Inc Tax Payment Deal with UK Government Still under Scrutiny by Opposition

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Opposition politicians in the UK are still dissatisfied with the manner in which Alphabet Inc (NASDAQ:GOOG)’s subsidiary Google entered into an agreement with the UK government to pay a fixed amount of money to HM Revenue & Customs office.

The bone of contention appears to be the fear that taxpayers in the country may not have gotten value for their money if it is proven that the amount of tax that Google paid to the office is way below what corporations are required to pay in the country. Further, it appears that opposition politicians are turning the heat on the Chancellor of the Exchequer, George Osborne, to force him to reveal the details of the deal that the government entered into with the internet giant.

Recently, the accounts of the company were subjected to a rigorous audit to determine the exact amount of money that the company was supposed to pay to the UK government as a tax for the period from 2014 to 2015. This was occasioned by allegations that Google makes a lot of money on the UK soil yet what it pays to the government as a tax may only be described as meagre.

Following the audit, the company agreed with the government to pay £130 million pounds as a tax. But it has now emerged that out of the amount of money that the company paid as its tax for the period, a significant amount, £33 million, was share option payments that the company made to its staff. If this is the case, two key things are clear.

The first one is that the government was actually taken for a ride since the amount of money that it received from Google is far much less than what was expected. The second one is that the taxpayers in the country have a reason to complain since it is their right to get the much-needed services that are funded by taxes paid by the likes of Google.

According to John McDonnell, who acts as the shadow Chancellor of the Exchequer, the government has realised that it received a raw deal from the agreement with Google but is too ashamed to admit it. It is this type of stance that has led many opposition politicians in the country to ask the government to make public all the details of its dealings with Google.

However, Google has responded by saying that it has always sought to comply with all the laws that govern the areas in which it operates. The company has also vehemently disputed the allegation that it included stock options payments in its figure for a tax to the government.