Netfix? This is the one big reason to DISLIKE Netflix

Company generated £200m in revenue, but paid zero tax

Netflix 2005

A Netflix promotional shindig of some kind in 2005

Netflix is nice. You pay some pounds each month to the Netflix people, and in return you can watch lots of things on your telly or computer without having to endure adverts. It’s a good system.

People like it and the company has grown fast. Since launching in 2012, Netflix has gained 4.5 million subscribers in Britain and recorded £200m in revenue. In America the service has 40 million subscribers.

Subscriptions in Britain cost £5.99 each month.

However, despite raking in millions of pounds from its massive customer base, Netflix does not pay a penny in corporation tax to the treasury.

Of course, like any self-respecting money-grubbing international firm, Netflix sends the money it takes on a meandering journey through Luxembourg and a panoply of complex legal loopholes.

It has become such a hackneyed tale that companies that do pay what they ought to must feel like mugs.

Most recently, London Loves Business reported that Cadbury’s owners Mondelez paid absolutely sweet FA on a profit of almost £100m.

According to the Sunday Times, which carried out the investigation, Netflix’s accounts are based in Luxembourg, and show a net turnover of £415m and profits of £11.3m in 2014. The company paid tax in Luxembourg of about 5%, making their contribution about £573,000.

In addition, the company has said it is “in expansion mode”, and is therefore making overall losses internationally.

There is no suggestion that the conniving company has broken the law. The British government is apparently at ease with the laws which continue to accommodate such behaviour.

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Readers' comments (2)

  • Anonymous

    Quite why George Osborne does not change the tax laws to make everybody pay is a mystery. After all he told us that we 'are all in this together' - unless you happen to be a big multinational corporation.

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