Revenues up, taxes down: Google UK reports its slice of the Chocolate Factory pie

Blighty's wage bill tops £1bn as more staffers are added

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Google's UK tentacle booked a jump in revenues for the year ended 30 June 2019 while still managing to cut its tax bill by more than £21m.

The figures, filed at Companies House yesterday and made available to read today, saw revenues of £1.6bn flood Google's coffers, up from £1.4bn in the previous year, but an increase of more than £200m in "administrative expenses" meant the company's profit before taxation actually fell from £246.3m to £225.8m.

Due to how Google UK's revenues are recognised and reported, there is every chance that ad revenues were actually quite a bit higher; the company only generates revenues through service agreements with other Alphabet group companies (primarily marketing and services support).

Number boffins at Statista estimated that UK ad revenues away from the gaze of HMRC were more like £5.1bn in 2019, up from £4.43bn in 2017. Google's parent company, Alphabet, reported total ad revenues of $135bn for FY2019 in its February financials.

Despite the increase in revenues, there was still a drop in tax paid by the giant to £44.3m from £65.6m for the same period in 2018. Profit for the financial year ended slightly up, at £181.5m versus £180.7m.

The increase in costs can at least partly be attributed to a rising headcount in the company's UK outpost. Google added 781 workers in the period, taking its workforce from 3,658 to 4,439. Google UK also incurred £462m (up from £388m in 2018) of expenses providing research and development services "to a related third party" including its US parent.

Those 4,439 employees are currently made up of 1,723 in marketing, 2,171 in research and development, and 545 in management and administration.

And goodness, those workers are well paid. The total wages, with social security and pension payments, came to £1.04bn up from £829m the previous year. The figures included a share payment bonanza for staff of £441m, almost up £100m from the £342m of 2018.

The search giant also remarked that the UK corporation tax rate, maintained at 19 per cent in the 11 March 2020 budget rather than reduced to 17 per cent from 1 April 2020, would affect its tax calculations. ®

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