Facebook's UK Tax Bill Just Rose to £15.7 Million

Facebook paid £15.7m in tax in the United Kingdom last year, which is triple the amount it paid in the previous year.

Accounts filed last week on Companies House revealed the social media giant's profits for its United Kingdom office, which covers expenses on marketing, sales and engineering support, rose 6.3 per cent to £62.7m in 2017, up from £58.4m a year earlier.

Facebook's revenue rose by a third year-on-year to £1.2bn in 2017, because of increased revenues from inter-company and advertising reseller services in 2017.

The tech giant saw United Kingdom revenues of more than £1.26bn, but corporation tax is paid on profits rather than revenues and Facebook saw its profits suppressed by spending £758m to bring in sales and another £444m on administrative expenses.

Facebook will not pay the full £15.7m, however - its net tax charge will be only £7.4m due to HMRC rules allowing the company to offset tax on profits against employee share awards.

That itself is an increase of an increase, because the 2016 tax bill was also higher than the previous year, up from £4.2 million in 2015. That's only for its United Kingdom operations, mind, since the parent company reported £1.2 billion in revenue last year, a third year-on-year rise, as a result of increased revenues from inter-company and advertising reseller services. It is thought that the plan will call for the tax to be based on the revenues of big technology firms rather than their profits, in order to stop companies from routing funds through other countries.

Hammond pledged at the Conservative party conference last month that the United Kingdom would "go it alone" if necessary by implementing a so-called digital services tax.

The social networking giant said that it meant to expand its United Kingdom operations further in the future.

"By the end of 2018 we will employ 2,300 people in the United Kingdom and we are doubling our office space in London's King's Cross with capacity for more than 6,000 workstations by 2022".

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