Tech

Facebook Pays Less Tax Than You

Now there's a headline that'll have the UK spitting its tea all over their screens.

Analysts at the Sunday Times have declared that Facebook paid just £4,327 in UK corporation tax last year - a wallet-shuddering £1,000 less than the average UK worker.

And it didn't break the law

The social media giant was able to exploit several financial loopholes to pay the minimum in corporation tax: by paying its 362 London-based staff around £210,000 each in salary and bonuses with a share bonus scheme (rather than straight cash), it incurred an accounting loss that allowed it to pay the minimum corporation tax.

£5,393 - income tax and NI paid by average UK worker

£4,327 - total corporation tax paid by Facebook

Its UK profits of £105 million were also sent to Facebook's international HQ in Ireland, before being transferred to an account in the Cayman Islands - which doesn't collect corporation tax.

The most galling aspect of this story is that Facebook is playing ball with the UK tax system, telling the Sunday Times it was "compliant with UK tax law and in fact all countries where we have employees and offices. We continue to grow our business activities in the UK."

The Organisation for Economic Co-operation and Development recently revealed new regulations that would stop large companies such as Facebook, Apple and Google from creating corporate structures and devices that could target financial loopholes. 

We give it around 12 months before their accountants discover new loopholes in these new loophole-closing measures.

[Via: Sunday Times]

(Image: Rex)

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