Google says it would pay more tax in UK

The technology giant has come under heavy fire for using tax laws to avoid paying a more significant level of corporate tax in the past.

However, Mr Schmidt told the Edinburgh Television Festival yesterday that Google "loves" Britain and would pay more tax if it were legally required to do so. He said the company's hands were tied by Britain's low tax demands.

"It is true we could pay more tax but we would have to do so voluntarily. It's called paying the legally minimum amount of tax required," he said.

"The fact of the matter is there are lots of benefits to [being in Britain]. It's very good for us, but to go back to shareholders and say 'We looked at 200 countries but felt sorry for those British people so we want to [pay them more]' . . . there is probably some law against doing that."

Mr Schmidt's comments come after months of controversy surrounding the UK's corporate tax system, which has seen campaign group UK Uncut target high street chains including Vodafone, Boots and Barclays. Violence has often been used, bringing condemnation from business leaders.

Activists from UK Uncut claim that a number of major companies have avoided paying corporation tax on their offshore assets.

Although Google has not been targeted by UK Uncut, the company's fiscal policy has come under fire for diverting some £2bn of its UK revenues through Ireland, where corporate tax rates are lower.

Mr Schmidt said that the online search giant, which employs more than 1,000 people in the UK, was committed to having a presence in the UK regardless of the rate of tax.

"We love Britain. If Britain changes its tax laws, we will pay taxes in accordance with those laws. I can't be clearer than that," he said. His comments will reignite the debate about paying tax in the UK, with Mr Schmidt putting the issue firmly at the door of the Government. The Treasury did not comment last night.

Mr Schmidt also spoke about Google's agreement to buy Motorola Mobility for $12.5bn (£7.6bn) for the first time since the deal was announced, claiming the group is interested in handsets as well as its library of 17,000 patents and 7,500 pending patents. But he added that Google did not want to find itself "disadvantaged" in the growing "patent wars" brewing in mobile computing.