Facebook pays no UK corporation tax for second year running
Facebook was today facing a fresh row over offshore tax avoidance as UK accounts showed it paid no corporation tax for the second year in a row while granting shares worth tens of millions of pounds to London staff.
Research firm eMarketer estimates Facebook’s London operation in Euston made £371 million in revenues last year, up from £223 million a year earlier.
However, the accounts show lower revenues because Facebook processes much of its British sales in low-tax Ireland.
Facebook UK declared revenues of £49.8 million and a pre-tax loss of £11.6 million.
The social media giant incurred a tax charge of just £3,200 and ended up receiving a credit of £182,000 because of adjustments for prior years.
Yet the US parent company is highly profitable, reporting a net profit of $1.5 billion (£900 million) last year.
The company ran up a £15.5 million cost for “share-based payment” for its 208 London staff but they got far bigger windfalls.
UK staff collected more than 1.5 million free shares which were “settled” and are worth about $119 million (£72.5 million), based on Facebook’s present stock price above $78.
That works out at about £350,000 a head per employee if they have held onto their shares.
In addition, employees are in line for a further 2.2 million shares, worth about £105 million.
Facebook declined to comment but has said it always pays tax according to the laws of each country.
Chancellor George Osborne has promised a change in the law to crack down on offshore tax avoidance after warning last month: “Some technology companies go to extraordinary lengths to pay little or no tax here.”
