Where's that dislike button? Facebook latest giant to avoid UK tax

Where's that dislike button? Facebook latest giant to avoid UK corporation tax
That old Irish office loophole works a treat... again

Not only is Facebook robbing the UK's offices and workplaces of anything approaching connectivity, it is failing to compensate the country for the privilege, it was revealed on Monday.

A quick look at Facebook's accounts shows the company paid zero corporation tax to Her Majesty's Revenue & Customs in 2012, despite bringing in an estimated income of £223m from UK ad sales.

Officially, the Facebook UK arm made a £2.4m loss on £36.4m turnover in 2012 (partly due to stock options afforded to employees) meaning it paid no tax, down from very little (£238,000) in 2011.

What the accounts do now show, however are the ad sales, because they are routed through Facebook's Irish office, rather than counted as UK sales - a practice companies such as Amazon and Google have also used to work around the system.

Luck of the Irish

The ad-sales estimations come from eMarketing firm, which also suggested Facebook's UK-based advertising sales revenue will be boosted by a third to over £300m in 2013.

With £11.8m in unrecognised tax losses still to be accounted for and ad sales being channelled through another country, it appears that Facebook will be able to avoid paying UK corporation tax for years to come.

Commons Public Accounts Committee chairman Margaret Hodge, a campaigner against the practice said" "This is yet another example of what appears to be deliberate manipulation of accounts of economic activity to deprive the British taxpayer of a rightful tax contribution, according to the profits they make in the UK."

A Facebook spokesperson 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."

TOPICS
Chris Smith

A technology journalist, writer and videographer of many magazines and websites including T3, Gadget Magazine and TechRadar.com. He specializes in applications for smartphones, tablets and handheld devices, with bylines also at The Guardian, WIRED, Trusted Reviews and Wareable. Chris is also the podcast host for The Liverpool Way. As well as tech and football, Chris is a pop-punk fan and enjoys the art of wrasslin'.

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