UK Fund Houses Question Alphabet Tax

Four UK fund houses representing almost £1tn of assets have written to the board of Alphabet, Google’s parent company, to raise concerns about its tax arrangements. The group, which owns billions of dollars worth of shares in Alphabet, will add to pressure on the US technology giant after Indonesia’s regulator last week said it could hit the company with a bill for more than $400m in back taxes on advertising revenues booked outside the country. Legal & General Investment Management, the UK’s largest fund house, the Local Authority Pension Fund Forum, which represents 71 public pension funds, Royal London Asset Management and Sarasin Partners, the investment boutique, signed the letter to Eric Schmidt, Alphabet’s chairman. “Our point about tax was not just the obvious ‘are you avoiding it’, but also ‘have you really properly considered the implications for brand value and your license to operate in society’,” said a senior executive at one of the companies. Alphabet has acknowledged the letter and will put it to the board, he said.