Facebook paid £28.5m tax in UK from £1.65bn revenue

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Facebook paid just £28.5 million in UK tax last year despite reporting growing revenue of £1.65 billion from advertising sales.

The tech giant’s latest UK accounts reveal that pre-tax profits jumped by more than 50% from the year before, to £96.6 million.

Its total tax bill for 2018 came in at £30.4 million, but this was reduced by £1.9 million due to deferred tax and effects of changes in tax rates – up from the £15.8 million it paid in tax for 2017.

MP Margaret Hodge, who chairs an all-parliamentary group on responsible tax, called the amount “outrageous”.

“One year later and little has changed,” she tweeted.

“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.”

Labour’s shadow chancellor, John McDonnell, said: “How many more examples of large-scale tax avoidance does this Government need before it will take action?

“It’s no wonder people are outraged at the grotesque unfairness of our tax system.”

Facebook’s vice president of Northern Europe, Steve Hatch, said the company was investing heavily in the UK and will employ 3,000 people in the country by the end of the year.

Facebook’s pre-tax profits increased by 54% from 2017 to 2018, to £96.6 million (Dominic Lipinski/PA)

“The UK is now one of Facebook’s most important hubs for global innovation,” he explained.

“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 spent £356.2 million on research and development in the country last year, an increase from the £263.7 million in 2017.

Its head count went from 1,290 in 2017, to almost 2,000 in 2018, accounts also showed.

Earlier this week, a global economic body proposed an overhaul to the way big tech giants are taxed.

The Organisation for Economic Co-operation and Development suggested re-allocating some profits and corresponding taxing rights that large and highly profitable multinational firms pay, in countries where they have “significant consumer-facing activities and generate their profits”.

Chris Price
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