Google to be grilled over tax

A panel of UK lawmakers will next week grill representatives from Google Inc and its auditor, Ernst & Young, following a Reuters report that highlighted inconsistencies in Google’s statements about its UK activities.

The Public Accounts Committee (PAC) said on its website that the representatives would testify on May 16.

Google has attracted the ire of British lawmakers for the way it pays almost no income tax on billions of dollars of UK sales each year.

At an earlier hearing in November, Google’s Northern Europe boss, Matt Brittin, said that all UK sales were conducted from Ireland and that no sales took place from Britain.

At a PAC hearing in January, John Dixon, head of tax policy at Ernst & Young in London, told lawmakers his firm checked to ensure a tax client’s activities on the ground matched what was claimed in their accounts.

Last week, the committee’s chairwoman, Margaret Hodge, said she planned to recall Google and Ernst & Young, after Reuters revealed that the Internet search giant had described its London offices on its website as a base for sales teams and advertised dozens of London-based sales vacancies.

Google declined comment on the scheduled hearing but referred to its comments last week before it received a formal invitation, in which it denied that Brittin had misled the PAC in November and said it would be happy to testify to the committee again to explain its position.

Ernst & Young said it welcomed the opportunity to help the committee’s inquiry.

“We support improving certainty and transparency in the global tax system and compliance with it,” it said in a statement.

Last week a spokeswoman said the auditor and tax adviser stood by Dixon’s testimony and said it followed all audit rules.

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Google to be grilled over tax