[DanBC]

Laws are written by politicians, and interpreted by judges.

Tax cases are expensive and complex to investigate. Google probably has more money that the entire UK tax authorities. HMRC has to concentrate their efforts somewhere, and they concentrate on the people who are clearly breaking the law, or where they have whistle-blower evidence that laws are being broken.

That puts companies like Google at an advantage. They can operate at the edge of the law, exploiting loopholes, and then pay more if the laws are changed. And then, if we find out that they are not obeying the law but breaking it they make a deal with HMRC. See the deal Vodafone made where a huge tax bill was waived, if Vodafone paid a small part of the tax they had evaded. (http://www.guardian.co.uk/money/2011/dec/06/hmrc-tax-deal-vo...)

Dodging tax is only beneficial to these companies.

As to why they should pay: Apart from the fact that UK customers of Google buy UK ads for their UK potential customers using UK bank accounts and UK pounds and buy them from UK staff at Google's UK office (with a final 'close the sale' bit of paperwork done in Ireland for the sole purpose of avoiding tax in UK) - apart from that, Google makes use of UK schools and roads and police and fire departments and etc.

No one minds that Google pays less tax than they should. People only mind when Google goes to extraordinary lengths to avoid tax.