Crown v The Crown
Taxman is checking accounts of £100bn US streaming giant
NETFLIX has attracted Her Majesty’s undivided attention – as the streaming giant is watched by the taxman.
The US firm, with nine million subscribers, makes the drama The Crown, starring Olivia Colman next season.
Netflix confirmed its accounts are “under examination” by HMRC. It insisted it is a “standard review” of its first set of accounts here, from 2015. But it will shine a spotlight on the financial structure of the firm – which flows cash from UK subscribers to a parent firm in Amsterdam.
Rather than booking payments, Netflix Services UK Limited is 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: 20% of the price of every Netflix UK subscription.
“HMRC regularly audits the accounts of UK companies and we’re currently engaged with them on this standard review.”
Netflix’s UK arm had revenue of £24million last year and a £1.1million profit but paid no tax.
The £100billion operation is the latest US tech firm to face financial scrutiny. In 2016, Google agreed to pay £130million in back taxes in a settlement with HMRC.
HMRC said it could not comment on individual cases.