Scottish Mortgage boss call’s on Google to pay ‘much more’ as SNP look to spark EU inquiry

James Anderson, who runs the £3 billion Scottish Mortgage Investment Trust that owns £120 million shares in Google’s parent company, Alphabet, has launched a chastening attack on the tech giant over its UK tax obligations.

As resentment continued to grow throughout Britain following Google’s £130 million deal with the UK taxman for a decade’s worth of multi-billion pound business, Mr Anderson called on the company to pay “much more” as he argued it was now time for Google and other multinationals such as Facebook to voluntarily to pay far higher tax rates in the countries where they operated.

He called on US technology companies to campaign for a “reasonable” rate of global profit tax of 15 to 20 per cent, far higher than the 3 per cent that Google’s critics claim that it pays in the UK.

Mr Anderson, who has a formidable reputation among technology investors, is the first British institutional investor in Google to publicly demand that it do more after the controversial £130 million settlement with HM Revenue & Customs announced last Friday.

He said the low tax policy of Google was a result of short-termism and there are other investors who privately worry that while the policy might be good for share prices now, a lack of publicly acceptable contributions runs the risk of firms eventually being hit with draconian measures or a consumer backlash.

“My take remains that it is in the longterm interests of Google and others of that ilk to pay decent rates of tax and that they and others would be best served in taking the lead in volunteering this,” Mr Anderson told The Times newspaper. That meant paying “much more” UK tax. “They are beneficiaries of state spending at many levels and in return they would get respect,” he said.

While Google’s agreement with HM Revenue & Customs, covers 10 years during which the company’s turnover period ran into billions of pounds Chancellor George Osborne has again insisted the deal was a “major success” for the taxman.

But Mr Anderson’s intervention also comes as it emerged that Scottish SNP politicians may have sparked a Brussels investigation into the controversial back-dated deal.

Margrethe Vestager, the EU’s competition commissioner, looks set to consider complaints about the agreement after the SNP wrote to her calling for an inquiry.

Stewart Hosie, the SNP’s deputy leader, said a key problem with the back-tax deal was a lack of transparency.

“The truth is that we know very little about the settlement reached between the tax authorities and the company. These discussions have taken place in private; little detail has been revealed by the Treasury and the methodologies employed by HMRC are shrouded in secrecy.”

John McDonnell, Labour’s shadow chancellor, also wrote to the commission last night to raise concerns about the deal, citing public concern about the “low sum offered by Google in lieu of taxes dating back over a decade”.

“We believe £130m to be significantly lower than a fair or reasonable assessment of Google’s UK turnover and profits would suggest, with experts suggesting that Google has been levied and effective tax rate of around 3 per cent,” McDonnell said.

EU competition officials have previously shown themselves willing to act against tax deals struck by member states.