Tuesday, 14 August 2012

38 Degrees Fuckwittery

Here's my response to online activists 38 Degrees and their petition to get Google to pay its "fair share" of tax, a reaction to a flawed and discredited article in the Telegraph recently. They say:
By sending money offshore Google’s revenue and profit here in the UK falls. That seems to be part of the reason Google recorded a loss in the UK last year.
I say:

Your petition was based on the Google UK Ltd results. Google UK provide marketing and R&D services to Google Ireland Ltd and Google Inc., that is to say that their only two customers are other Google group companies. The value of these services, or what the company turned over was £395,757,534. To provide these services, Google UK incurred the following expenses in 2011:

Advertising and promotional expense - £105,474,648
Professional services - £9,815,144
Auditor's remuneration - £55,000
Stock based compensation expense - £51,457,135
Depreciation and amortisation expense - £5,748,424
Employee benefit expense - £190,644,447
Other administrative expenses - £53,667,487

Total - £416,862,285

Quite simply, the company made a loss because its expenses were greater than its income. Substantial expenses relate to employee costs (employee benefit and stock compensation), which is probably a good thing, keeping people gainfully employed. There is no suggestion that Google UK is sending money offshore, quite the opposite in fact noting that its revenues (i.e. the flow of income into the UK) come from Ireland and the US.

I was also amused at the the following on the petition page - "Originally this petition was published using mistaken information from The Telegraph." Kind of invalidates the whole thing really.

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