Facebook UK pays just £5.1m in corporation tax despite rising profits | Facebook
Facebook’s UK operations paid just £5.1million in corporation tax last year, despite rising profits and revenue that nearly quadrupled on the back of increased advertising sales.
The social media company said UK revenue rose from £210.8m to £842.4m for the year to December 31, helping pre-tax profits rise by 52, £5m to £58.4m for the period, according to accounts filed at Companies House. .
But its UK corporation tax only rose to £5.1million from £4.2million the previous year, and once deductible expenses were applied, the company didn’t have to. paid just £2.58 million.
Facebook said the surge in revenue was “due to the launch of ad reseller services” by its UK operations in April 2016, which attracted “large UK customers”.
The slight rise in corporation tax came after Facebook was publicly criticized for paying just £4.3 million in tax in 2014 under a deal that dealt with corporate income. UK operation as a payment from Facebook Ireland for services.
Routing sales through Ireland meant Facebook was subject to corporation tax at a lower rate, but the company announced last year that it would end the practice.
Facebook later made voluntary changes to the amount of tax it pays after mounting pressure from activists.
Commenting on the latest accounts, a spokesperson said: “Last April, we actively chose to revamp our business structure to bring revenue from our large UK business customers to the UK.
“We thought it would bring greater transparency to our operations in London and be easier for people to understand. These accounts reflect this change.
“We continue to invest and grow in the UK, employing 1,500 people in our new offices by the end of this year, which is also home to our largest engineering base outside of the US.”
Facebook UK said in its accounts that it employs an average of 960 people in any given month, spanning its engineering team, sales support and marketing staff.
At the end of December, Facebook announced that it had increased its workforce to 1,065 employees.
It then paid nearly £207m to staff, up from £165m a year earlier, covering salaries, wages, social security, pensions and share award schemes.
However, its administrators were paid by other Facebook entities because they held management positions in other parts of the company.