Anger over £28m Facebook tax bill
FACEBOOK paid just £28million tax in Britain last year despite turnover of its UK arm rocketing to a record £1.6billion.
Critics say the owner of Instagram and WhatsApp is masking the size of its British operation by funnelling cash earned from advertisers to Ireland.
Last night, one MP declared the latest revelation over Facebook’s finances as “outrageous”.
In the decade that Facebook – founded by Mark Zuckerberg – has operated here, its main UK-registered business has generated a turnover of £4.2billion.
From just £4.8million in 2008, this rose by £300million last year to £1.6billion – or £50 a second.
Of that, just under £800million came from advertising, a 50 per cent leap on the previous year.
Its UK turnover has soared recently because of the amount of money it received from big advertisers. The remainder came from “support” services for other Facebook companies.
But Facebook UK has struggled to make consistent profits, which its corporation tax bill is based on, and recorded losses of almost £109million between 2011 and 2015.
However, accounts published yesterday by Companies House revealed that Facebook UK’s profits jumped from £62.8million to £96.6million last year. But it has only made £219million in the decade it has been in Britain – just five per cent of turnover. After losses, this falls to just 2.6 per cent.
Labour MP Margaret Hodge, a long-time tax campaigner, called Facebook’s latest £28million tax bill “outrageous”. Shadow chancellor John McDonnell said: “How many more examples does this government need before it will take action? It’s no wonder people are outraged at the grotesque unfairness of our tax system.”
Professor Richard Murphy, a tax expert at City, University of London, said: “We need all large companies to declare precisely what tax they pay on their profits in each country where they operate. Then we’ll know what’s paid and they will have to explain their tricks, or stop doing them.”
Steve Hatch, Facebook’s vice president for Northern Europe, said: “Businesses across the country use our platforms to grow and revenue from customers supported by our UK teams is now recorded here so that any taxable profit is subject to UK corporation tax.”