HER MAJ TAKES ON THE CROWN
BY GRAHAM HISCOTT NETFLIX have attracted Her Majesty’s undivided attention – as the streaming giants are probed by the taxman.
The US firm, who make hit series The Crown and have nine million UK subscribers, have said their accounts are “under examination” by HMRC.
Netflix insisted it’s a “standard review” of their first set of accounts here, from 2015.
But it will shine a spotlight on the financial structure of the firm, who have grown rapidly to become a £100billion global media titan.
The money paid by their UK subscribers is not booked here but instead flows to a parent company in Amsterdam.
Rather than booking payments, Netflix Services UK are said to provide “marketing and other support services” to the Dutch entity.
Netflix said: “The provision of our service to UK subscribers results in significant amounts of VAT for the UK Government and 20 per cent of the price of every Netflix UK subscription.
“HMRC regularly audit the accounts of UK companies. We’re currently engaged with them on this standard review.”
Netflix’s UK arm had revenue of £24million last year and made a £1.1million profit but paid no tax.
Netflix were founded in the US in 1997 as a postalbased online DVD rental store, introducing their monthly subscription concept two years later.
In 2000, they were losing money and offered themselves for sale to video rental giants Blockbuster for £35million.
Blockbuster said no in one of the biggest mistakes in retail history. They went into administration in 2013 as the trend towards streaming over the internet destroyed their market.
In the meantime, Netflix became a global TV and film giant.
They are the latest US tech firm to face scrutiny over their finances.
In 2016, Google agreed to pay £130million in back taxes in a settlement with HMRC.
HMRC said they could not comment on individual cases.
NETFLIX ON THE TAX INVESTIGATION