Search giant Google has not followed the example of fellow multinational Starbucks, who last week pledged to overpay on their corporation tax, instead offering a defiant rebuttal of the claims of their accusers, with chairman Eric Schmidt determined the UK Treasury would not receive any more tax from his company.
"I am very proud of the structure that we set up," he said in an interview in New York.

"We did it based on the incentives that the governments offered us to operate.

"There are lots of benefits to [being in Britain]. It's very good for us, but to go back to shareholders and say, 'We looked at 200 countries but felt sorry for those British people so we want to [pay them more]', there is probably some law against doing that.”

Google have come under fire from MPs after it was revealed that despite approximately £2.5 billion in UK sales last year, the Californian tech leader paid just £6m in corporation tax.


According to the Independent: '[Google] has also been revealed to have sheltered nearly $10bn of its revenues in Bermuda allowing it to avoid some $2bn in worldwide income taxes in 2011.'

It is inevitable that Google should adopt this defensive, unbending stance. Unlike Starbucks, who saw protests outside stores and a jump in sales to its rival Costa, Google are unlikely to see a mass boycott of their limited range of tangible products, such as their Nexus tablet or Chromebook laptop; nor are they likely to see advertisers and internet users abandon their online search tools in favour of Microsoft Bing or another competitor. And whilst activists and politicians have seen PR win over executives at Starbucks, the same result is unlikely with a digital monolith like Google.

MP Margaret Hodge said "we are not accusing you of being illegal, but immoral," and theirin lies the crux of this taxation argument. Schmidt is not interested in varying opinions on morality, but simply the legislation in place that allows off-shore tax avoidance - delivering the best value to shareholders. Schmidt simply shrugs "that's just capitalism."

Undeterred, Margaret Hodge will hope to engineer enough support to induce a media frenzy and subsequent public opinion to force Google and Schmidt to U-turn.

"For Eric Schmidt to say that he is ‘proud’ of his company’s approach to paying tax is arrogant, out of touch and an insult to his customers here in the UK," she said.

"Ordinary people who pay their taxes unquestioningly are sick and tired of seeing hugely profitable global companies like Google use every trick in the book to get out of contributing their fair share. Google should recognise its obligations to countries like the UK from which it derives such huge benefits, and pay proper corporation tax on the profits it makes from economic activity here. It should be ashamed, not proud, to do anything less."