The UK has been privately lobbying the EU to keep Bermuda from the bloc’s official blacklist, according to a page 1 story in yesterday’s Observer.
The story received considerable media attention during the day because it makes a feature of the fact that, as the Observer puts it, the US internet giant, Google, has been using Bermuda to funnel “billions of pounds of profits”.
The revelation that the UK is seeking to keep Bermuda off the EU’s blacklist came as Google was already in the UK’s media spotlight, as a result of a controversial deal struck between HM Revenue & Customs and Google that will see Google pay just £130m in back taxes to the UK government for a 10-year period during which it is alleged the company under-paid.
The Observer said the fact of the UK’s lobbying efforts on Bermuda’s behalf was revealed in a memorandum circulated among Conservative party European Parliament ministers, which it said describes potential EU “countermeasures” against blacklisted tax havens as “unhelpful”.
The UK is Google’s largest non-US market, accounting for around 11% of its global revenues.
The Observer’s story was the subject of discussion on Sunday morning’s Andrew Marr show on BBC1, with both the UK Government’s Business Secretary Sajid Javid and Google spokesman Peter Barron fielding questions on the issues raised.
The Treasury responded to the Observer‘s report by saying it was “simply wrong to suggest the UK is anything other than at the international forefront of tackling aggressive tax planning, avoidance and evasion”.
“The government has led the way in the G20 to strengthen international rules that counter aggressive tax planning by multinational companies, and supported global tax transparency through the automatic exchange of information, which will help HMRC to crack down on tax evasion,” a Treasury spokesperson told the Observer.
“All of the UK’s Crown Dependencies and Overseas Territories are early adopters of this new global standard. This is all in addition to introducing the world-leading diverted profits tax which stops companies moving profits to tax havens.”