Facebook pays no UK tax on revenues of £223m
Facebook paid no corporation tax in the UK last year despite generating an estimated £223m in revenues.
The social media giant's decision to process its UK sales in the Republic, which avoids tax, will reignite the controversy about how US tech giants are not contributing their fair share to the UK economy.
Accounts filed to Companies House show Facebook UK made a pre-tax loss of £2.4m on turnover of £34.6m. However, eMarketer, an independent analyst firm that specialises in tracking digital spend, estimates Facebook generated £223m last year from advertising in the UK.
Facebook, led by Mark Zuckerberg, will have booked most of those sales in Ireland despite many advertisers being based in Britain, a controversial technique that is legal under HM Revenue & Customs' tax law.
According to previous filings to Companies House, Facebook UK has paid just £1m in corporation tax since opening a London office in 2007, even though it is estimated to have made over £500m in sales in that time.
There is no doubt Facebook, the world's biggest social media site, is profitable and continues to grow, with over one billion users and 24 million daily users in Britain. Facebook's US stock market value has soared this year to $123bn (£77bn) despite newer rivals such as Twitter emerging.
Commons Public Accounts Committee chairman Margaret Hodge said: "This is yet another example of what appears to be deliberate manipulation of accounts to deprive the British taxpayer of a rightful tax contribution, according to the profits they make in the UK. I am getting fed up of this constant stream of stories and little sign of a challenge from HMRC and a strange silence from Government."
A Facebook spokesman said: "Facebook pays all taxes required by UK law and we comply with tax laws in all countries where we operate and have employees and offices. We take our tax obligations seriously, and work closely with national tax authorities around the world to ensure compliance with local law."
The tax debate has intensified recently with executives from Google, Amazon and Starbucks being grilled by Hodge's committee, which urged the Government and HMRC to reform tax law.