Business Secretary Sajid Javid said he shared the feeling of injustice over the so-called “sweetheart” deal struck between HMRC and Google but “it is important”
The internet has earned an estimated £7.2bn profit in the UK over the past decade and paid £130 million as taxes for the same period.
“It wasn’t a glorious moment, when people look at these issues,” Mr Javid told BBC1’s Andrew Marr show. “But it is important, I think, to talk about also what the Government is doing.”
“I speak with thousands of companies, small and medium-sized as well as of course large companies, and there is a sense of injustice with what they see,” added Mr Javid.
“They do look at this and they say, ‘Look, I don’t operate all these multiple jurisdictions around the world, I can’t shift profits around. What about me? Where’s the level playing field?’ and I share that sense and the sort of sense of unfairness that exists.”
Earlier Google’s Peter Barron told the Andre Marr show that working out how much profit was earned in Britain was “quite a business” and had been the subject of six years of audits.
Mr Javid also clarified the decision taken by the Conservative government to block tax loopholes created by the Labour government.
“Last five years we have closed 40 loopholes to raise £12 billion and we led the way for changing the rule for other countries to share tax information will bring results,” he added.
The business secretary said there must a system to stop multi-national companies shifting profits to avoid tax.