Facebook only paid £28.5 million in UK taxes last year despite reporting growing revenue of £1.65 billion from advertising sales.
The tech giant’s latest UK accounts reveal that pre-tax profits jumped by more than 50% from the year before to £96.6 million.
Its total tax bill for 2018 came in at £30.4 million, but this was reduced by £1.9 million due to deferred tax and effects of changes in tax rates – up from the £15.8 million it paid in tax for 2017.
Labour’s shadow chancellor, John McDonnell, said:
How many more examples of large-scale tax avoidance does this Government need before it will take action?
It’s no wonder people are outraged at the grotesque unfairness of our tax system.
Facebook’s vice president of Northern Europe, Steve Hatch, said the company was investing heavily in the UK and will employ 3,000 people in the country by the end of the year.
The UK is now one of Facebook’s most important hubs for global innovation.
Businesses across the country use our platforms to grow and revenue from customers supported by our UK teams is now recorded here so that any taxable profit is subject to UK corporation tax.
Facebook spent £356.2 million on research and development in the country last year, an increase from the £263.7 million in 2017.
Its headcount went from 1,290 in 2017, to almost 2,000 in 2018, accounts also showed.
Earlier this week, a global economic body proposed an overhaul to the way big tech giants are taxed.
The Organisation for Economic Co-operation and Development suggested re-allocating some profits and corresponding taxing rights that large and highly profitable multinational firms pay, in countries where they have “significant consumer-facing activities and generate their profits”.
We need your help ...
The coronavirus pandemic is changing our world, fast. And we will do all we can to keep bringing you news and analysis throughout. But we are worried about maintaining enough income to pay our staff and minimal overheads.
Now, more than ever, we need a vibrant, independent media that holds the government to account and calls it out when it puts vested economic interests above human lives. We need a media that shows solidarity with the people most affected by the crisis – and one that can help to build a world based on collaboration and compassion.
We have been fighting against an establishment that is trying to shut us down. And like most independent media, we don’t have the deep pockets of investors to call on to bail us out.
Can you help by chipping in a few pounds each month?