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Google Sees UK Sales Increase To £3.4 Billion

Michael Moore joined TechWeek Europe in January 2014 as a trainee before graduating to Reporter later that year. He covers a wide range of topics, including but not limited to mobile devices, wearable tech, the Internet of Things, and financial technology.

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However 16 percent rise in sales is the company’s lowest growth rate for three years

Google has revealed that its UK sales rose just 16 percent in 2013, the company’s lowest growth rate in this country for three years. Total UK revenue for last year stood at £3.4 billion.

The search engine giant, whose offices in Dublin are the headquarters for sales operations across Europe, the Middle East and Africa, recorded a £500m increase in British sales compared to 2012.

The UK was the only country given separate figures in its US reports, highlighting its status as Google’s biggest foreign market, contributing 10 percent of the company’s total revenue.

The figures were revealed in Google’s 10-K annual report, filed on Wednesday to the US Securities and Exchange Commission (SEC).

google-london-officeTaxed out

The company has recently come under fire from politicians and the public in the UK in relation to its financial records, having been accused of using underhanded tactics to reduce the amount of tax it pays to HMRC, and leading to Google representatives being grilled before a parliamentary committee twice in 2013 over its tax practices.

Although it did not release a specific tax figure for this year (which it will do later as part of the usual Companies House filing process), Google announced that its total combined tax for the entire company was down 12 percent, at $3.82bn (£2.3bn), with overseas tax charges, including deferred taxes, totalling $743m (£446m) in 2013.

The company said the fall in tax paid was due in part to “proportionately more earnings realised in countries that have lower statutory tax rates”.

In 2012, the company announced that it had paid just £35m in UK taxes, including £11.6m in corporation tax, on revenues of £506m, despite selling British customers products worth £3 billion.

The company’s relatively small UK tax footprint is the result of a structure which designates the British office as a marketing operation selling services from Google’s European headquarters in Ireland. The company’s British turnover is primarily a marketing service fee paid by the Irish operation, as well as a research and development fee of £109m from the US.

Last year, PAC chair Margaret Hodge branded Google “devious, calculated and unethical”, accusing the company of “deliberately manipulating the reality of their business”.

“You are a company that says you do no evil and I think that you do do evil in that you use smoke and mirrors to avoid paying tax,” she said at the hearing.

The report showed that Google’s growth easing was also reflected in its biggest market, the US, where sales were up 14 percent to $26.8bn (£16.2bn) compared to 34 percent in 2012. Sales from the rest of the world grew by 26 percent to reach £16.6 billion in 2013.

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