Facebook’s UK tax bill has been branded “outrageous” after accounts revealed it had to pay just £7.4 million.
The technology giant’s bill rose to £15.8 million but it will get an immediate cut by claiming tax credit.
The company had record revenues last year of more than £1.2 billion.
The latest UK tax bill is triple the £5.1 million paid in 2016.
Absolutely outrageous that Facebook's UK tax bill is 0.62% of their revenue here; on an income of Â£1.2 billion they really should be paying much more than Â£7.4 million.— Margaret Hodge (@margarethodge) October 8, 2018
The net charge for 2017 comes to £7.4 million, following tax relief of £8.45 million for granting employees shares in the firm.
Labour MP Margaret Hodge said it was “absolutely outrageous that Facebook’s UK tax bill is 0.62% of their revenue”.
She added: “On an income of £1.2 billion, they really should be paying much more than £7.4 million.”
Conservative MP Damian Collins, chairman of the Digital, Culture, Media and Sport Select Committee, said the firm should pay more tax to reflect “the value of their business in the UK”.
He tweeted: “We should have a levy on the big tech companies to help fund online media literacy education and to support our data watchdog.”
Shadow chancellor John McDonnell said: “The Tories are letting large multinationals get away without paying their fair share of tax. Philip Hammond is letting Facebook off the hook.”
According to the company’s accounts, while Facebook increased its revenue by a third year-on-year, its profits – on which tax is paid – only climbed by £4 million to £62 million.
Its profits were reduced by £759 million in sales and £444 million in unexplained “administrative expenses”.
The publication of Facebook’s tax bill comes on the back of extensive scrutiny in the UK over how much tax technology giants typically pay.
At the Conservative Party conference last week, Chancellor Philip Hammond threatened internet giants with a new digital services tax to ensure they pay their fair share of the cost of public services.
A Government spokesman said: “The UK has led the way internationally to ensure companies change their behaviour and pay the right amount of tax.
“The best way to tax international companies is through international agreements, but if we cannot reach such an agreement the UK will go it alone with a digital services tax of its own.
“HMRC has a very strong track record for enforcing the rules on everyone and subjects large businesses to an exceptional level of scrutiny. Large companies, like any other taxpayers, must pay the tax that is due and we do not settle for less.”
Facebook said it has changed the way it reports tax so that revenue from customers supported by its UK team is recorded in the UK, and any taxable profit is subject to UK corporation tax.
It is also planning to double its office space in King’s Cross, London, with capacity for more than 6,000 workstations by 2022.