Top 5 worst tax return expense claims

Meg Hillier, who chairs the Common’s Public Accounts Committee (PAC, ) will call Google and HMRC figures before MPs to explain the deal, which she said showed the taxman “admitting it pulled in too little tax from Google for nine out of 10 years”.

Taxpayers are reminded there is now only one week left to submit your 2014-15 online tax return, and pay what you owe to HMRC to avoid a £100 late-return penalty. In 2014 it paid more than £8m in tax on the back of record profits of £34.2m. Companies like Apple and Amazon have been criticized for employing similar legal practices to reduce their tax burden.

On Friday evening, it emerged that Google had agreed an unusual deal with HM Revenue and Customs to pay an additional £130 million in corporation tax over the past decade – during which time it is thought to have made more than £7 billion in United Kingdom profits.

“It looks to me from all the independent analysis that this is relatively trivial in comparison with what should have been paid”.

However, a spokesperson for HMRC said: “We intensively manage the tax risks posed by multinationals”.

Mr McDonnell said: “George Osborne should be ashamed and not proud that the person cleaning his office could be paying a higher effective tax rate than a big company making huge profits in this country”.

The proposal is part of sweeping reforms from the European commission to close the main tax loopholes and end sweetheart deals that have helped multinational companies avoid billions in corporation tax.

In March’s Budget the Chancellor announced the introduction in April of a so-called “Google tax” targeting firms that move their profits overseas.

“The successful conclusion of HMRC enquiries has secured a substantial result, which means that Google will pay the full tax due in law on profits that belong in the U.K.”, HMRC said in a statement.

Google, which now comes under its parent company Alphabet Inc, has its headquarters based in Ireland and is one of many American companies accused of tax evasion in Europe.

He said the Google agreement was not in line with proposed rules backed by the Organisation for Economic Development (OECD) and supported by Osborne, which link taxes to revenues earned in a particular country. “This settlement reflects that shift and is in line with recent OECD guidance”.

The back taxes that Mountain View has agreed to pay go as far as 2005.

“For Labour to complain now is at best selective amnesia and at worst shameless hypocrisy”. That said, the search giant is trying to get ahead of the negative publicity by paying its taxes.