AdSlot 1 (Leaderboard)

Facebook UK paid less than £5,000 in corporation tax in 2014

A SCHEME which saw Facebook’s UK staff take home an average of more than £210,000 last year in pay and bonuses drove the social network’s corporation tax bill down to just £4,327.

The company made an accounting loss of £28.5m in Britain in 2014, after paying out more than £35m to its 362 staff in a share bonus scheme, according to Facebook UK’s latest accounts.

The bonus scheme was worth around £96,000 to each employee. After salaries were factored in, staff took home an average of £210,000.

Booking a loss meant Facebook was able to pay less than £5,000 to HM Revenue & Customs for the year. Last year, Facebook made a profit on its worldwide operations of $2.9bn (£1.9bn), on revenue of $12.5bn. UK revenues were £105m last year.

A spokeswoman for Facebook said: “We are compliant with UK tax law, and in fact in all countries where we have operations and offices. We continue to grow our business activities in the UK.”

The news comes as the OECD’s Base Erosion and Profit Shifting (BEPS) project – designed to curtail tax avoidance activity by multinationals – concluded with a series of recommendations, including new minimum standards on country-by-country reporting.

Chancellor George Osborne has taken every opportunity during his tenure to cut corporation tax, levied on company profits, on the proviso that in exchange all firms must pay their “fair share” to the exchequer. The headline corporation tax rate was 28% when Osborne arrived at the Treasury and is 21% today, set to drop to 20% in April.

Companies including Google, Amazon and Starbucks have been in the firing line for their use of offshore jurisdictions to drive down their UK tax liabilities in recent years.

Those activities saw Osborne separately introduce the diverted profits tax – popularly dubbed the ‘Google tax’ – which will see a 25% levy applied to multinationals when they attempt to move profits out of the country.

Those plans caused embarrassment at the OECD, according to Pascal Saint-Amans [pictured], the body’s director leading the BEPS project. Appearing via video link before Australia’s Economics References Committee in April, Saint-Amans said such moves could cause other countries to take unilateral action of their own.

Despite those concerns, Osborne last week tweeted: “Taxes should be paid where profits are made. Great to see OECD BEPS rules agreed here in Lima. UK will lead by example and implement early.”

Related reading

/IMG/200/112200/fraud
/IMG/779/289779/cyber-security-2-web
/IMG/917/325917/robott42q
/IMG/820/282820/cyber