Daily Mirror (Northern Ireland)
Facebook paid £28m tax... on sales of £1.6BN
Labour slam firm over UK bill after record turnover 2,000 Tech giants banking on Cook accountant
Tax-avoiding tech firms Facebook, Amazon and Google all use the same accountant.
Ernst and Young is one of the Big Four firms, along with Pricewaterhousecoopers, Deloitte and KPMG.
However, all four are facing calls for them to be broken up after a number of high-profile corporate failures.
EY was the auditor for holiday giant Thomas Cook for the two years before it collapsed recently and earned some £7million in fees.
EY and PWC are set to be quizzed by MPS investigating the failure of the high street holidays giant.
EY was paid £64,000 for auditing Facebook UK’S 2018 accounts.
But the company is believed to have raked in considerably more from other contracts with the US giant. THE UK arm of Facebook paid just £28.4million in corporation tax last year – despite notching record turnover of £1.6billion.
The subsidiary was boosted by cash from big advertisers, booked here rather than abroad since 2016 after the social media giant caved in to pressure.
But while its tax bill was up from £17.2million in 2017, critics said it was still not paying its fair share as other ad sales are still being funnelled offshore.
Shadow Chancellor John Mcdonnell said: “How many more examples does this Government need before it will take action? No wonder people are outraged at the grotesque unfairness of our tax system.”
And Labour MP and tax campaigner Margaret Hodge said the bill was “outrageous”.
Facebook, founded in the US by Mark Zuckerberg, expanded here in 2008 and its main Uk-registered business has had total turnover of £4.2billion.
Last year’s £1.6billion was up £300million on 2017 and of that, some £800million came from advertising – up 50%. The remainder came from “sales support, marketing and engineering support” for other group entities.
Facebook UK started off with a £439,884 profit in 2008 – 9% of its turnover – and paid £147,884 tax. But it had losses of almost £109million from 2011 to 2015.
Accounts from Companies House reveal profits rose from £62.8million to £96.6million last year. But it has only made a £219million profit in a decade – or 5% of turnover. Once losses are offset, it is 2.6%.
Professor Richard Murphy, a tax expert from City, University of London, said: “We need all large companies to declare precisely what tax they pay on their profits in each country.
“Then we’ll know what’s paid and they will have to explain their tricks, or stop doing them.”
The Tax Justice Network’s Alex Cobham added: “If Facebook had declared UK profits on sales at the same rate it does globally, it would have paid another £100million in tax.”
Steve Hatch, Facebook’s vice president for Northern Europe, said: “Revenue from customers supported by our UK teams is now recorded here so any taxable profit is subject to UK corporation tax.”
ON GIANT’S BILL