Google has been recalled to give evidence about its UK tax arrangements to parliament's Public Accounts Committee (PAC) for a second time. Google's auditor, Ernst & Young, will also be required to provide further evidence.
It comes after a Reuters investigation into Google's advertising sales practices, which contrary to the web firm's claims at a previous parliamentary hearing, discovered that Google has sales staff based in the UK.
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Speaking to the PAC last November, Google's European boss Matt Brittin said the firm's sales team was based in Dublin, Ireland, where corporation tax is just 12.5 per cent, nearly half of the current 23 per cent rate in the UK.
He denied that sales activities were taking place on UK soil, saying "Nobody [in the UK] is selling," before going on to claim that there were "a couple of hundred" staff at its European headquarters in Dublin who are responsible for selling to UK clients.
Google's staff "on the ground [in the UK] are helping people make the most of the web", he said, "and the people in Ireland are helping to operate the systems and sell advertising to the businesses that want to work with us."
But according to evidence gathered by Reuters, with sources including Google websites, Google employee profiles on the internet and interviews with clients and former staff, it seems some of Google's sales team are in fact based in the UK. If that indeed is the case, then Google could be compelled to pay higher sales taxes.
"We will need to very quickly call back the Google executives to give them a chance to explain themselves and to ensure that actually what they told us first time around is not being economical with the truth," said Margaret Hodge MP, chair of the PAC.
Google has issued a statement denying any wrongdoing and insists that it is compliant with UK tax laws.
"Our advertisements for UK staff sometimes refer to sales skills and many of the roles include sales in the title as we are seeking to attract people with those skills and that background. We accept that the wording of some adverts may have been confusing and we are working to make it clearer.
"As we have said many times, we comply with all the tax rules in the UK and in every other country in which we operate."
Google paid £6m in tax on its 2011 £395m British revenue. Last month, Google chairman Eric Schmidt defended the firm's UK tax arrangements.
