GOOGLE, the internet giant with the motto “don’t be evil”, avoids paying more than £100m a year in UK tax despite pulling in annual revenues of more than £1.25 billion.

Even though the web search engine operates as Google UK Ltd in London, British firms which advertise with it pay their subscriptions to a subsidiary based in Ireland, where corporation tax is far lower than in the UK.

This structure, condemned this weekend as “unfair” and “unacceptable”, allowed Google legally to avoid paying £110m of UK tax in 2007, according to research by an expert on corporate tax avoidance.

Google’s massive advertising revenues have already been blamed for ravaging the finances of newspapers, broad-casters and other creative industries. It is in dispute with musicians and songwriters, including Abba’s Bjorn Ulvaeus, Jools Holland and the singer Alison Clarkson, known as Betty Boo, for the royalties it pays for videos on its YouTube site.

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