Letter to my MP - Google's tax deal

I am concerned by the deal between HMRC and Google which was announced this weekend. It is hard to believe that the UK has come out well from the negotiations.

Google's position throughout has been that it pays all the tax it is bound to.  Matt Brittin, President of Business and Operations in Europe, is quoted by the BBC as saying "We were applying the rules as they were and that was then and now we are going to be applying the new rules, which means we will be paying more tax".

If Google was really applying the "rules as they were" then no back tax is due, yet the settlement includes a payment of £130 million for taxes owed since 2005. This is obviously inconsistent, and does not make me confident that the result of the negotiations has been presented honestly.

Then again, is £130 million the right sum?   Tax specialist Jolyon Maugham does not think so.  He calculates that £200 million would be appropriate for 2014 alone, and doubts that the company's tax payments in future years will be acceptable, since the company organisation allows it to report different earnings in the UK accounts and in those it presents to Google's investors.

The deal is criticised across the political spectrum, with Mark Garnier MP of the Treasury select committee observing that the agreement represents a "relatively small" amount of money compared with Google's UK profits.

George Osborne describes the deal as a "victory" but Robert Peston of ITV puts it more sophisticatedly.  The critics "may well have natural justice on [their] side; whereas Osborne may have done as well as any Chancellor could, given the power of global companies to move their homes to minimise their tax liabilities".

I would be interested in your views, because I suspect that many voters will join me in taking the "natural justice" position.