Two of mobile’s biggest players are another time making headlines for the small amount of tax they may be paying despite having large operations within the UK.

Google has denied that that is misleading HMRC over its business and tax arrangements after its head of UK sales, Matt Brittin, appeared this morning in front of MPs at the Public Accounts Committee. 

The search giant was recalled by the committee and asked to provide an explanation for why it’s paying so little tax within the UK despite huge revenues here. Between 2006 and 2011, Google made $18bn in revenues inside the UK but paid just $16m in corporation tax – though companies are just obliged to pay tax on profit. 

Although the PAC’s chairperson, Margaret Hodge MP, said that she has seen confidential evidence on the contrary, Google says that each one of its UK sales – worth £4.2bn last year – are made in Ireland because they’re done online. Brittin said: “99 per cent of the firms that spend with us spend with google in Ireland and aren’t chatting with anyone inside the UK.” The committee also asked what the 1,300 UK staff are doing in the event that they aren’t making sales.

Meanwhile, Amazon’s accounts have revealed that it received more in government subsidies than it paid in UK corporation tax last year. Its corporation tax bill was just £2.44m on sales of £4.2bn –  less than the £2.5m given to it by the Scottish Government in return for building a distribution centre in Dunfermline. It has 4,200 UK staff but says most of its work is completed in Luxembourg, where is has just 380 people at the ground. 

As neither company is doing anything illegal, there are increasing demands law makers to enhance financial legislation which will better determine where money is being made and where the tax is due. Many of the businesses being called out on tax avoidance are technology firms working where the normal geographical lines are getting blurred and law makers haven’t kept up with changes within the way business is being done.