UK Politics

John McDonnell publishes tax return amid Google tax row

Shadow chancellor John McDonnell Image copyright Reuters
Image caption Shadow chancellor John McDonnell has published his tax return

Shadow chancellor John McDonnell has published his tax return and has urged Chancellor George Osborne to do the same.

The details of Mr McDonnell's earnings and tax, which amounted to £61,575 and £14,253 respectively, were published in the Sunday Mirror.

His disclosure comes amid a row over a government deal for Google to pay £130m in tax dating back to 2005.

Despite criticism, Mr Osborne has said the agreement is a "major success".

But Mr McDonnell said "we can't tell" whether it was a success " because we haven't got the information".

"I want the information on how this deal was arrived at and I want them in future to be able to publish the tax records," he told the BBC's Sunday Politics.

He called for an international action to prevent companies "shopping around the world to find the lowest tax regimes and then inventing their company structures to enable that to happen".

But he added "the reputational damage to Google, I think, is immense," and he suggested the "saving they have made in tax is not worth the reputation damage they have had".

'Open and transparent'

In the Sunday Mirror, Mr McDonnell wrote that the government's deal with Google had "created a lack of confidence" in the tax system.

He said taxpayers filling in their returns, due by midnight, would be "feeling angry".

Online tax return deadline looms

He wrote: "The chancellor, the politician with sole responsibility for setting taxation, should be open and transparent about their own income.

"That is why in the spirit of the 'new politics' I have taken the decision to publish my personal tax returns.

"And I will do so every year while I seek to be and hopefully one day become chancellor.

"I think it is only fair that politicians set a good example."

Mr McDonnell has also written to Mr Osborne asking for more details of the tax deal with Google.

In the letter, he wrote: "As you will be well aware, many are concerned about the outcome and, indeed, the process by which the decision was made."

Image copyright PA
Image caption Mr McDonnell has written to Mr Osborne asking for more details of the tax deal with Google

He wants to know whether Google has paid the Diverted Profits Tax, which is designed to discourage large companies diverting profits out of the UK to avoid tax, and the basis for the deal.

Earlier this week, the European Commission said it was considering how to respond to a letter of complaint from the SNP about Google's tax deal with the UK.

Google agreed to pay £130m of tax to HMRC, which said it was the "full tax due in law".

Prime Minister David Cameron defended the deal, saying the Conservatives had done more than any other government.

But European MPs have described it as a "very bad deal", and Labour said it amounted to a 3% tax rate.

More on this story