It also channels money via another subsidiary registered in the tax haven of Bermuda, as another way of legally avoiding paying tax.

However, a member of the Treasury Select Committee believes that Google could be called in to explain its tax practices to MPs.

"It is entirely immoral, this is a company avoiding its obligations and we are letting them get away with doing it," John Mann told the Independent.

"I think it would be highly appropriate to pull a Google executive in front of the committee to justify their failure to pay proper taxes. We would be looking at covering the issue in this parliamentary session, so before Easter, realistically.

He added: "Whether it is illegal or immoral, the British tax payer loses out. Google is one of the big ones, but there are others."Google reported overall losses of £24.1 million in the UK, where it set aside a £51.4 million charge for share awards to its employees.