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

Facebook's UK tax bill triples to £15.7m

Facebook's UK tax bill triples to £15.7m

The UK subsidiary of e-payments giant PayPal (PYPL) has agreed to pay an extra €3.1m (£2.7m, $4m) in tax to Britain's tax authority, Her Majesty's Revenue and Customs (HMRC).

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.

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.

In 2016, Facebook's tax bill rose to £5.1m, following a major overhaul of the social media firm's tax structure.

The social media giant's accounts show that while Facebook increased its United Kingdom income by more than 50% in 2017, its pretax profits remained similar to 2016.

The perception that technology companies do not pay enough tax to cover their societal footprint has prompted politicians to consistently threaten to levy funds from them to tackle numerous issues.

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Facebook's latest United Kingdom results have been published as the chancellor, Philip Hammond, prepares to introduce a new digital services tax to prevent USA tech firms such as Facebook, Google, Twitter and Amazon from moving sales income through other countries in order to cut their British tax bills.

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.

Last week, Chancellor Philip Hammond raised the prospect of introducing a new tax to address this concern.

In another development, PayPal's United Kingdom subsidary has agreed to pay an extra £3.1m in tax following a review by HMRC.

Its revenue rose to £1.2bn, an increase of more than a third year-on-year, due to an increase in intercompany services and advertising reseller activities.

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