Facebook’s UK tax payments under fire

Facebook’s UK tax payments have been branded ‘outrageous’ by a former chair of the public accounts committee (PAC), after the tech giant’s accounts revealed it paid £28.5m in tax in 2018, while revenues hit a record £1.65bn

Accounts filed at Companies House show that profits last year at the social media company were up by 54% to £96.6m. The multinational’s total tax charge almost doubled to £30.4m in 2018, up from £15.7m a year earlier, but  this was reduced due to adjustments were made for deferred tax and changes in tax rates.

Margaret Hodge, former PAC chair who now chairs the all-party parliamentary group on responsible tax, criticised the amount of UK tax paid by Facebook as too low, following a tax bill of £7.4m in 2017.

In a tweet, Hodge said: ‘One year later and little has changed. This year Facebook paid £28m of tax on UK income of £1.6bn.

‘These big corporations simply must pay more tax. They rely on our infrastructure, our expertise, and our sales so they must pay their fair share into society. Still outrageous.’

Steve Hatch, the company's vice president for Northern Europe, said: ‘The UK is now one of Facebook's most important hubs for global innovation. We continue to grow and invest heavily in the UK and by the end of the year we'll employ 3,000 people here.

‘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.’
Facebook said it complies with tax laws in all jurisdictions and pays what is legally due.

There has been a similar outcry this month over the amount of UK tax paid by Mondelez, owners of Cadburys. With turnover of £1.7bn in the UK, Mondelez UK paid only £271,000 in tax last year.

Last week, the OECD announced a consultation on its proposal to advance international negotiations on a new approach to defining nexus and transfer pricing, ‘to ensure multinational enterprises, including digital companies, pay tax wherever they have significant consumer-facing activities and generate their profits’.

By Pat Sweet

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