Facebook dodges corporation tax despite £223m revenue

Facebook paid no corporation tax in Britain last year, despite making an estimated £223m in revenue last year.

Accounts filed by the company reveal that the social networking giant made a pre-tax loss of £2.4m in 2012. The advertising revenues do not show up on the company’s UK tax as the firm puts them through the books in Ireland where corporation tax is lower.

Margaret Hodge, chairman of the Commons Public Accounts Committee, 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.”

Facebook said: “We pay all taxes required by UK law and we comply with tax laws in all countries where we operate.

“We take our tax obligations seriously, and work closely with national tax authorities around the world to ensure compliance with local law.”

Speaking to the Daily Mirror, Richard Murphy, of Tax Research UK, questioned whether sales from UK advertising should be recorded here.

He said: “If it did I suspect it would be profitable.

“So is this company avoiding tax? Yes, because it is not recording its sale income in the UK.”

Murphy estimated the company’s UK advertising sales stood at more than £200m last year, while independent analysts eMarketer estimated the figure at £223m.

Readers' comments (1)

  • Anonymous

    So what. Did they comply with the law? Yes.

    Considering how billions in taxpayers money is wasted by the government, who can blame anyone for avoiding it where possible.

    In any case, their profits are far better spent in reinvestment or paid out as dividends and spent to boost the world's economy.

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