Google sees UK pay and bonus bill top £1 billion

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 Google UK operation is primarily used as the marketing and sales division of its European operation.

The tax payment is down on the £66m 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.

It has also expanded R&D, spending £462m in “providing research and development services to a related party during the year”.

The UK 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 per cent digital service tax.

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

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

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