Facebook’s UK revenues surge to £842m ... but firm pays only £2.6m in tax

Surging profits: Facebook
Sean Gallup/Getty

Facebook’s UK operations paid just £2.6 million in tax last year despite its revenues surging more than four-fold to £842 million.

The social media giant, led by founder Mark Zuckerberg, also revealed that it made a bumper pre-tax profit of £58.4 million in Britain in 2016, compared with a loss of £52.5 million in the previous year, according to accounts filed today.

The small size of Facebook’s tax bill in Britain is likely to stir fresh criticism of the way in which Silicon Valley-owned global tech giants use accounting techniques to minimise payments to the countries they operate in.

The accounts for Facebook UK, lodged with Companies House, show that it was liable for just £5.1 million in corporation tax, but this was partially offset by a £2.7 million rebate.

The net bill was £2,577,082. However, this compares with a net credit of £11,322,063 in 2015.

Notes to the accounts show that Facebook’s tax bill would have been £11.7 million if the then prevailing corporation tax rate of 20 per cent had been applied to its profits.

However, this was sharply reduced by tax-deductible “expenses” related to bonus payments.

In July the parent company of Facebook, which has two million users globally, announced a 71 per cent increase in quarterly profits to $3.89  billion for the second quarter of the year.

The UK accounts also show that Facebook’s 960 British employees — almost all London-based — had an average salary of £108,000 last year.

If share-based bonus payments of £77.98 million are included this rises to almost £190,000.

Facebook said in a statement: “Last April, we actively chose to reorganise our company structure to record revenues from our large UK sales to customers in the UK.

“We believed this would provide greater transparency on our operations in London and be easier for people to understand. These accounts reflect that change.

“We continue to invest and expand in the UK, employing 1,500 people in our new offices by the end of this year”.

The Facebook accounts come as ellow tech giant Amazon was ordered to pay 250 million euros in back taxes to Luxembourg by the EU, which said the company had received illegal state aid. It also emerged that Brussels is taking Ireland to the European Court of Justice for failure to recover up to 13 billion euros in back tax from Apple.

Tesco finally closed the door on the worst disaster in its history today when it revealed a huge surge in profits and paid a dividend for the first time in three years.

Britain’s biggest supermarket group, which was rocked by a vast accounting scandal in 2014, said profits soared almost eightfold from £71 million to £562 million in the first half of the year.Sales in the UK rose for the seventh quarter running and were up 2.2 per cent over the six months to the end of August. Tesco said its success was due to “serving shoppers a little better every day”.

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in

MORE ABOUT