Facebook slammed for paying £28million tax after £1.6billion UK earnings – despite 50% profit surge
FACEBOOK is under fire for paying just £28.5million in UK corporation tax last year.
The social media giant generated £1.65billion in British sales – but paid just 1.7% of this sum in tax.
It comes as Facebook's latest UK accounts show that pre-tax profits surged from £63million to £96.6million.
That's an impressive 50% rise, despite the firm being dogged by privacy scandals throughout 2018.
Of course, it's important to note that tax is only paid on profit.
So Facebook actually paid an overall tax rate of around 29.5% – higher than the 19% corporation tax rate.
The payment was also adjusted for deferred tax.
"One year later and little has changed," said Margaret Hodge, who leads an all-party parliamentary group examining the tax system.
"This year Facebook paid £28m of tax on UK income of £1.6bn.
"They rely on our infrastructure, our expertise, and our sales so they must pay their fair share into society.
"Still outrageous," she added.
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- Microsoft: £822,641,580,000
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- Facebook – £441,321,600,150
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However, Facebook denies that it has paid an unfairly low amount of tax.
It says it has been investing in the UK for more than a decade, employs thousands of people, and has several large offices across London.
"The UK is now one of Facebook's most important hubs for global innovation," said Facebook's Steve Hatch, who heads up its Northern Europe division.
"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 ot UK corporation tax."
Some of Facebook's large costs eating into UK profits included a £356million research and development bill, and a £431million wage and pension tab.
Facebook famously paid just £4,000 to the Treasury in 2014.
And has come under fire for completing certain sales in Ireland, allowing the firm to take advantage of lower tax rates.
Other tech companies also pay small tax amounts relative to overall revenues in the UK.
Google paid £66.8million on £1.4billion in turnover, Apple paid £10million on £1.2billion revenue, and Amazon paid £220million against £10.9billion in cash generated.
However, profits are typically much lower than sales in the UK, leading to lower tax bills.
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