The UK tax authority has indicated it is investigating Google over its tax affairs following evidence from a whistleblower who claims British taxpayers are being "cheated" by the company.

Former Google executive Barney Jones claims the internet giant has a system in place that diverts British profits through Ireland to the Bermuda tax haven. He revealed earlier this year that he has a cache of more than 100,000 emails and documents detailing the scheme. The Public Accounts Committee (PAC) yesterday criticised HM Revenue and Customs (HMRC) for failing to launch legal proceedings against the company after referring Mr Jones to investigators. Jim Harra, director general for business tax, appeared to indicate that a wider investigation was taking place and insisted HMRC "always acts" on the evidence it is given.

He told the PAC: “I acknowledge that you did refer the whistleblower to us and I believe he did confirm to the press that we met him and we took his evidence from him and that we paid a great deal of interest to what he had to tell us and that is what we do with anyone who provides evidence. We take it very seriously and we always act upon it if it indicates non compliance by a taxpayer.”

Meanwhile, PwC tax partner Fergal O’Rourke has told Bloomberg that he believes the days of the “Double Irish” tax structure, which has helped multinationals reduce their tax liabilities, are numbered. Changes in Ireland and worldwide are inevitable, he said, primarily because the OECD is targeting tax avoidance. As such, he predicts that Ireland will eventually prohibit companies like Google and Apple from setting up units in Ireland that don’t owe income taxes there.

(Additional reporting PA/Bloomberg)