Google is set to fork out just £6m in UK taxes despite taking in £395m in revenue last year, according to reports.

That means, the search giant, which employs 1,300 people in the UK, will be paying a relative tax rate of 1.5 per cent for the year of 2011. In 2010, Google contributed just £8m

The figures, reported by the Daily Telegraph, will add to the criticism aimed at Google, and indeed the government, on the disproportionate tax rates payable in its host nation.

A Google spokesperson defended the company's record of job creation in the UK and said it was simply abiding by the rules.

Big contribution

The statement said: "We comply with all the tax rules in the UK.

"We make a big contribution to the UK economy by employing over a thousand people, helping hundreds of thousands of businesses to grow online and investing millions supporting new tech businesses in East London."

The report comes following comments from Google's executive chairman Eric Schmidt, who claimed last year that Google 'could contribute more in the UK.'

"We could pay more tax but we would have to do so voluntarily," he said. "There are lots of benefits to [being in Britain]. It's very good for us, but to go back to shareholders and say 'We looked at 200 countries but felt sorry for those British people so we want to [pay them more]' ... there is probably some law against doing that."

Perhaps its about time Mr Cameron and Mr Clegg stopped squabbling and took a look at those tax laws, but then they wouldn't want to upset the PM's alleged 'cosy relationship' with Google now, would they?

Via: Telegraph