Sunday, 21 October, 2018

Facebook says UK tax bill triples to £16m

FRANCE-COMPUTING-APP-ECONOMY-SOCIAL-MEDIA-RETAIL Facebook's most recent data breach could cost it up to $1.6bn in fines
Ginger Lawrence | 12 October, 2018, 22:27

In 2016, Facebook's United Kingdom tax bill rose to £5.1m following a major restructure of how the firm paid tax.

Thanks to awarding shares to its employees, the social media giant is receiving £8.4m in tax relief, cutting its final amount owed down to £7.4m.

Facebook had booked a 7.5% increase in pre-tax profits to £62.8m on revenues of nearly £1.3bn - up nearly a third on 2016.

Margaret Hodge, the Labour MP who has led campaigns against tax avoidance, said it was "absolutely outrageous" how little tax Facebook was paying in the UK.

According to the company's accounts, while Facebook increased its revenue by a third year-on-year, its profits - on which tax is paid - only climbed by £4 million to £62 million.

There's always a lot of outrage whenever it's revealed how much tax big companies are paying, generally because it looks as though they're paying an absolute pittance when compared to the rest of their income.

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It pointed to damage to profitability from a £759m cost of sales and £444m in "administrative expenses" that were not explained.

Conservative MP Damian Collins, chairman of the Digital, Culture, Media and Sport Select Committee, said the firm should pay more tax to reflect "the value of their business in the UK".

Last week, Chancellor Philip Hammond raised the idea of introducing a new tax that would address this concern.

"HMRC has a very strong track record for enforcing the rules on everyone and subjects large businesses to an exceptional level of scrutiny".

Globally, PayPal reported revenues of $13bn (£9.9bn) and pre-tax income of $2.2bn (£1.9bn) in 2017 but didn't give a breakdown for the United Kingdom or Europe. It is thought that the plan will call for the tax to be based on the revenues of big technology firms rather than their profits, in order to stop companies from routing funds through other countries.

It is also planning to double its office space in King's Cross, London, with capacity for more than 6,000 workstations by 2022.