Questions over Google tax deal

London’s Conservative Mayor Boris Johnson called for “clarity” on where Google’s profits are made and senior Tory backbencher David Davis said the amount of back tax the firm has agreed to pay was a “very small number”.

HM Revenue and Customs (HMRC) has defended the deal, with a senior official insisting that it was collecting the “full tax due in law”.

But shadow chancellor John McDonnell wrote to Mr Osborne demanding full details of the settlement and questioning whether he or anyone else from his team in Number 11 had been involved in the arrangement.

He asked when Mr Osborne was first aware of the deal and whether he or a ministerial colleague personally signed it off.

Mr McDonnell also enquired whether Number 10 was involved in discussions of the deal before it was announced.

Claims that the settlement covering 10 years from 2005 amounted to a 3% tax rate have been rejected by officials and ministers, but Mr McDonnell asked: “What is HMRC’s understanding of the effective tax rate faced by Google over the past 10 years as a result of this settlement?”

Mr McDonnell also raised a Times report that HMRC had never challenged Google’s assertion that it did not have a “permanent establishment” in the UK.

“Such a claim is obviously critical to the entire tax issue,” he said.

He told Mr Osborne: “When times are tough it is more important than ever that everyone pays - and is seen to pay - their fair share.