Published: Fri, October 12, 2018
Economy | By

PayPal agrees to pay extra £2.7m in tax following HMRC review

PayPal agrees to pay extra £2.7m in tax following HMRC review

The bill compared with £5.1 million in 2016, Facebook's British division revealed in an official document lodged last week. Facebook also received £8.4m in tax credits from granting its employees shares in the company, meaning that its net tax bill will be £7.4m.

If you've been concerned with the amount of tax companies like Facebook pay, you'll be happy to hear that £15.7 is just over a quarter of £62.7 million.

Last year was the first full year where all revenue from large UK customers was recorded in the UK and any taxable profit was subject to UK corporation tax.

Margaret Hodge, the Labour MP who has led campaigns against tax avoidance, said it was "absolutely outrageous" how little tax Facebook was paying in the UK.

She added: 'On an income of £1.2 billion, they really should be paying much more than £7.4 million'. Philip Hammond is letting Facebook off the hook'.

Facebook paid £15.8m in tax in the United Kingdom a year ago after making a profit of £62.7m on record British sales of £1.27bn.

Its profits were reduced by £759 million in sales and £444 million in unexplained "administrative expenses".

Facebook and other tech giants have received significant criticism over how much tax they typically pay in Europe, with particular attention paid to revnues that are moved through other countries with lower corporate tax rates.

The news comes as the Treasury plans to introduce a new tax on advertising revenue for technology businesses in the United Kingdom, a move that Chancellor Philip Hammond hopes will spare United Kingdom start-ups and instead mainly affect USA businesses. "If we can not reach agreement, the United Kingdom will go it alone with a digital services tax of its own.".

By 2021, Facebook intends to double its office space in the United Kingdom, with a total capacity of over 6,000 workstations, when it moves into its new buildings in London's King's Cross.

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