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Facebook now paying millions in UK tax



Facebook paid over £4 million in UK tax over the last 12 months on profits of around £20 million, which marks a huge increase over its previous contributions.

According to the BBC, the company made just over £20 million in taxable profit on the business it booked through its UK subsidiary last year, which was on turnover of £210 million.

While it might not sound like a large tax bill in comparison to revenues, it's some 96,000% more than it paid the previous year, in which it paid just £4,327. A change in the way it reports business was enacted in April this year, effectively ensuring that the company pays regular tax rates in the UK, rather than routing all its largest business customers through Ireland to pay lower tax.

The switch came about after public outcry and closer government scrutiny of large US companies that paid lower than expected taxes due to the complex corporate structures in place. Indeed, in eBay's latest filing, it revealed it paid just £1.1 million in tax last year from global revenues of $1.4 bilion (£1.1 billion). It said just £185 million of those revenues came from its business in the UK, but also described Britain as its second largest market, according to The Guardian.

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Would you boycott using the services of US companies that don't pay proper tax in the UK? Let us know below!


October 10, 2016, 11:10 am

This is one of those issues that people continually get wound up about, but for the wrong reasons, and it annoys me that the media does little to help.

Corporation tax is a tax on profits, not a tax on revenue. It matters not a whit what the company's revenue was, just what their profits were. If a company has a massive revenue, and equally massive costs, then no profit is made, so no tax should be paid.

This is not to belittle the tax issues. It's just that they are more complex than most poeple seem to realise. Here are some of the real issues:

1) Is it really feasible for a successful company with UK revenue of £210 million to be making profits of just £20 million? (Personally, I have no idea if this is realistic or not). Do those figures indicate that they might be hiding profits as something else?

2) Are shareholders, staff members, or other beneficiaries of the company in receipt of large amounts of money which are out of proportion to the dividends paid? For example, if some of the difference between the £210 million revenue and the £20 million profit is due to 3 senior executives taking a salary of £50 million each, that might raise a few questions.
3) Is the global tax bill (of which the UK element will be a part) realistic? For example, are they paying the correct amount of UK tax as a way of creating a distraction from the fact that they are aggressively avoiding taxes in other countries? Also, are they artificially shifting profits away from the UK to other countries where, justifiably or not, they can get away with paying less tax?

I think it is absolutely right that the tax affairs of giant multinationals are subject to scrutiny and, if they are using their substantial resources to get out of paying tax, than they should be stopped, and furthermore, the tax systems of countries and between countries should be improved.

However, simply pointing to the vast revenues of these companies isn't necessarily very helpful.


October 12, 2016, 6:01 pm

Nobody pays directors millions just to turn money over. But in a reverse of the popular conjuring trick, these companies manage to conceal an awfully large rabbit inside an improbably small hat. So the only thing the media can point to is turnover or sales. The profits, apparently, are not there.

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