Google, Facebook and Twitter are facing renewed scrutiny of their UK tax arrangements after the Labour party criticised the companies' lack of social responsibility and called for them to help fund anti-cyberbullying measures.
In a Westminster Hall debate on Wednesday, Labour MP Helen Goodman said that social media firms were placing an extra burden on the UK public purse through the workload of teachers, police and social workers who had to deal with threats and harassment carried out on social networks.
"These firms are putting a new and costly burden on the public purse but they are not acting as responsible corporate citizens," Goodman told the debate.
"The government can't stand back and ignore this. Ministers need to ensure that [tax authorities] use all the weapons at their disposal and if necessary legislate further to crack down on these avoidance devices."
Goodman reiterated concerns over what she called artificial devices designed to depress profits, referring to the royalty that Google UK paid to its parent company for use of its search and advertising technology.
She cited Facebook's UK advertising sales of £175m in 2011 and accounts showing it paid £238,000 tax, while Twitter filed no UK accounts. Google paid £6.09m UK tax on 2011 revenues of £395m.
"[Google's] strategy is to minimise our tax and make up for it with a bit of corporate social responsibility – but in the grand scheme of things it's titchy. Are we going to accept that?" Goodman asked.
"We can carry on as we are, the industry can decide it is in its own interests to change its behaviour, or the government can set a coherent strategy that runs across departments."
Google and Starbucks have been called to a Commons public accounts committee hearing on Monday, along with revenue and customs inspectors, where MPs will grill both sides on corporate business contributions.
Google told the Guardian that it would not attend as the invited executive was not available at short notice.
"We make a substantial contribution to the UK economy through local, payroll and corporate taxes. We also employ over 2,000 people, help hundreds of thousands of businesses to grow online and invest millions supporting new tech businesses in East London. We comply with all the tax rules in the UK," Google said.
Facebook and Twitter declined to comment. Both companies are headquartered, for accounts purposes, in the Republic of Ireland, which is known for its generous corporation tax.
Goodman also called for new legislation and training, saying more clarity was needed between multiple pieces of legislation designed to tackle child protection, harassment and computer misuse, and that more needed to be done for e-crime and cyberbullying to be taken seriously.
She referred to the suggestion from Fiona Mactaggart MP that an enforceable code of conduct could be devised to protect children and adults online.
William Dutton, professor of internet studies at the Oxford Internet Institute, said there was something of a moral panic around social media akin to the rise of television in the 1950s.
"That anxiety is concentrated among people who don't use social media," Dutton said.
"Protection of children has nothing to do with taxing Facebook. Children should not be used as a lever for legislation about content controls online or taxation."
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