Finally Facebook agrees to pay millions more in UK tax following criticism...

Finally Facebook agrees to pay millions more in UK tax following criticism of Ireland arrangement


Facebook is likely to pay millions of pounds in tax after years of criticism over its arrangements to the British Government.

After the business ceases routing gains through Ireland income from a number of its biggest advertisers will now be taxed in britain.

The earnings will be subject to corporation tax, of which Facebook paid only GBP4,327 in 2014 despite an annual gain of GBP1.9 billion.

“Like all big organisations we discover an increasing amount of those we serve convey through and get their info from social networking,” a representative for HMRC said.

“Our investment in social media is carefully assessed to ensure we’re getting maximum value for the citizen.”

A representative for Facebook told The Independent the changes announced on Friday planned to increase “transparency” and fall consistent with tax changes created by the present Government.

“What this means in practice is the fact that UK sales made directly by our UK team is going to be reserved in britain, not Ireland. Facebook UK will record the earnings from these sales.

“In light of developments to tax law in britain, we believed this change would provide transparency to Facebook’s businesses in britain.

The organization has substantial offices in London and Dublin, in which a fresh HQ will be constructed to place around 850 staff.

Its Irish base uses nearly 1,000 individuals from 50 nations working in sections IT finance, engineering, sales and marketing.

Social media giant Facebook is one of a long line of transnational companies with Starbucks, Google and Amazon also coming under fire to be criticised on how big their UK tax bills.

The Chancellor, George Osborne, vowed to crack down on tax avoidance by introducing a “diverted gains tax” to penalise firms that transfer their gains outside the UK to nations with lower corporation tax rates so that you can pay less to the Treasury.

The punishment, nicknamed the “Google Tax”, came into effect in April a year ago.