Facebook has been accused of “disingenuous and immoral” tax avoidance, after a new analysis of its UK business suggested the US company paid just £238,000 in tax last year, after making £175 million in revenue.
• Facebook made £175 million in revenue in 2011 and paid £238,000 in tax
• Labour MP brands the US company “immoral”
• Google admits it “could pay more tax”
Accounts filed show Facebook’s London office paid £238,317 in corporation tax in 2011, an amount that represents less than one per cent of its revenue last year. The amount was down from 2010, when the company paid £424,651.
Labour MP John Mann told the Independent that it was “disingenuous and immoral” for companies like Facebook to make a profit in the UK, yet “not pay tax in the countries where they are based.
“They benefit enormously from the country’s internet infrastructure but do nothing to fund it. It’s like driving a car with no tax. We wouldn’t stand for it on our roads so why stand for it on the net?”
According to independent researchers Enders Analysis, Facebook’s UK advertising sales amounted to an estimated £175 million last year. However, the accounts showed that the company’s UK bill for staff costs and wages went from £7.9m to £24.8m, even though its workforce incresed by only nine, from from 81 to 90, representing a bill of £275,000 per head.
Google have also been criticised for paying low amounts of corporation tax in the UK, paying just £6 million last year.
Speaking at the Edinburgh Television Festival in 2011, Google executive chairman Eric Schmidt said: “It’s true we could pay more tax, but we would have to do so voluntarily.”