Google’s UK staff earned an average of £226,000 each last year as the company shared the spoils of a £350m payout from its stock scheme.
Google, with UK staff numbers jumping by almost 400 to 3,658 last year, footed an £829m wage and salary bill for the year to 30 June. The total was a 26% increase on the £656m paid to staff in 2017, according to the company’s latest financial filings.
The accounts show UK staff enjoyed a £342m bonanza in share-based bonuses thanks to Google’s surging stock price and financial performance in 2018 – 56% more than the £219m pot the previous year.
The pay bill was spent on 1,451 marketing staff, 1,783 research and development employees and 424 in management and administration. The figure is up from an average pay package of £200,000 in 2017.
The accounts also show Google paid £66.8m in UK corporation tax, up from £49.7m, as pretax profits rose from £200m to £246m. Google UK reported £1.4bn in revenues last year, up from £1.2bn, but this does not reflect how much it makes in advertising revenues as they are reported in other jurisdictions.
The research company eMarketer estimates that in reality Google made £5.3bn in ad revenue from the UK last year, accounting for 40% of the total digital ad market, and will make about £5.7bn this year.
Google UK operates as the marketing and sales arm for its European operation, which is headquartered in Dublin, where taxes are lower. The UK operation makes most of its reported revenue through an annual “research and development” fee from its US headquarters and a “marketing and services” payment from Dublin.
Google, which has a market value of more than $800bn (£600bn), made $136bn in total global revenues and profits of $30.7bn last year. In the Europe, Middle East and Africa region, revenues surged 33% to $44.5bn.
“As an international business, we pay the majority of our taxes in our home country, as well as all the taxes due in the UK,” a spokesman for Google said. “We are investing significantly in the UK, including starting work on our new offices in King’s Cross for 7,000 staff.”
The big Silicon Valley companies continue to be heavily criticised for their tax structures and the amount they ultimately pay into the UK’s coffers.
In October, Facebook revealed it paid just £7.4m in net in tax in the UK on £1.3bn of British sales. It said its UK pretax profits rose just 6% to £62.7m. eMarketer estimates that in reality Facebook, the second-biggest player in the UK digital ad market behind Google, made £3bn in online ad revenues.
Amazon paid only £4.5m in UK tax according to its most recent filing, despite reporting British sales of £8.7bn. Apple UK paid only £10m in tax on British sales of £1.2bn.
In October, Philip Hammond, the chancellor, announced the government would introduce a special digital services tax on US technology companies to make sure “these global giants with profitable businesses in the UK pay their fair share”.
He said the “narrowly targeted tax”, which would come into force in April 2020, would raise more than £400m a year for the exchequer. The tax will levy 2% on the revenues of search engines, social media companies and online marketplaces that make more than £500m a year globally.
