Technology giants doing wrong? It makes me mad
A view from Marc Mendoza

Technology giants doing wrong? It makes me mad

What a palaver. Google executives are grilled by MPs to justify why the world's most valuable company pays a lower percentage of tax than just about anyone in the UK, a few weeks after its £130 million payment - meant to recast them as decent citizens - backfired spectacularly.

Consider how the furore might impact two groups. First, Google, Facebook and the other tech tax-avoiders; and second, HM Revenue & Customs.

When it comes to the tech companies, there is a deep mismatch between what they say about "doing the right thing" by paying their dues and the public’s perception.

Paying only what is legally due is a valid defence – until it becomes obvious that this applies in real life only to individuals, not corporations, which rely on the goodwill of the public they are profiting from. Yet unless there is a movement to remove these companies’ "social licence" – their right to exist in our world – they will not care. I suspect they will only change if their bottom line suffers.

But the tax-avoiders should watch out. Supposedly indestructible brands have fallen out with their constituencies throughout history. Who would have thought News of the World would lose its social licence and fall so dramatically? And credit where it’s due to Ryanair, which realised its attitude problem would soon lose our custom and responded just in time.

There would need to be viable alternatives to replace Google and others in the public’s lives, but the momentum would be with the newcomer if the existing brands remain tainted by their tax affairs. There’s nothing Brits like more than to condemn a "villain". But the irony is that the driver for a change in public opinion is likely to be online – on the same successful platforms those tech giants created.

This brings me to a second point about HMRC’s revenue generation. I wonder about the impact on the psyche of high-earners as they learn how much is being legally avoided by others.

Like nearly all of the people who have worked in our business at a reasonably senior level, 33 years of 60-hour weeks have led to higher-than-average personal tax bills. It has always felt perversely good to pay them because this is the way the system should work. But, now, as I see how insignificant my contributions are relative to the payments legally avoided by companies generating billions offshore, it incenses me. It certainly makes it more tempting to press "snooze" next time the alarm goes off so others can take the strain of helping with HMRC’s job of income redistribution.

So Google, Facebook and friends, lie back and think of England. Maybe doing what you should do, rather than what you have to do, also makes business sense.

Marc Mendoza is the founder of 360 Degree Media