Google 'on front foot' with Eric Schmidt column on tax issue

Google has successfully got on to the 'front foot' over its tax issue after being stung by criticism, industry experts agree.

Google's London HQ: The focus of tax controversy
Google's London HQ: The focus of tax controversy

Following scrutiny over its tax dealings in Parliament last week, the search engine giant responded with a call for the Government to lead on tax reform.

In a column for The Observer, Google chairman Eric Schmidt said that Chancellor George Osborne had the ‘perfect opportunity to take the lead’ over the issue at next month's G8 meeting.

MHP’s director for media Ian Kirby called the move a classic example of getting on the front foot.  

‘It has learnt from previous situations like this that you can’t sit there, take negative press and give half answers or a generic statement,' he said.

‘In responding to allegations it has come up with something new to say, and that’s the right thing to do.’

Schmidt also defended Google’s tax practice and pointed to investment that he claimed would generate £80m a year in employment taxes and £50m in stamp duty.

It follows the company being forced to deny that it is disguising how it operates to minimise its tax bill.

Appearing in front of the Commons Public Account Committee on Thursday, Google vice-president Matt Brittin stood by evidence he gave last year that the firm’s advertising in Europe was sold through its Ireland-based offices.

Drew Benvie, founder and MD of Battenhall, said Google had been a victim of its own PR and tagline ‘Do No Evil’, a phrase that Public Accounts Committee chair Margaret Hodge claimed the company had not lived up to.

However, Benvie backed the decision to place a piece in The Observer, a title he claimed was well respected within the tech community.

He said: ‘It was the right move and it had to be him, otherwise it would have seemed that the issue was not being taken seriously. He cannot avoid this issue and had to take it head on. Putting his perspective at the beginning of the week was critical and is something he can refer to throughout the week when he is questioned.’

But Benvie warned that that Google now had to be imaginative in showing it was working with the Government on the issue.

‘If it is suggesting things need changing it needs to back up its words and do it publicly,’ he added.

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