Image Credit: Joel Saget / Getty Images
As is seemingly the case with many major international corporations doing business inside Britain, Facebook paid out an alarmingly low corporation tax bill in the UK last year, with the entire company handing over a paltry £4,327 to the Inland Revenue in total.
This sum, which Facebook insists keeps them “compliant with UK tax law“, is lower than the amount of tax paid annually for an individual earning the UK’s average wage of £26,500, despite the company having 362 staff members based in the UK earning an average of £210,000 each. This also means that Facebook’s own employees paid a far heftier tax bill last year than the company they are working for, with them handing over roughly £80,000 to the HMRC each – and that’s excluding National Insurance contributions.
So how did they get away with doing this? According to Huffington Post, the company gave its staff “shares worth upwards of £35.4 million,” which in turn ensured that they increased their losses to £28.5 million, thus decreasing the size of their tax bill. It is legal loopholes such as these that have led to such a vast amount of billion-dollar companies taking advantage of the UK’s taxation system, and has seen the likes of Starbucks and Amazon all getting away with paying no money into a country which generates them plentiful amounts of profit.
It was revealed in 2012 that Starbucks had paid no UK tax for three years. (Image Credit: Oli Scarff / Getty Images)
Speaking to the BBC, director of the Taxpayers’ Alliance John O’Connell said: “Taxpayers will be justifiably confused and angry about this tax bill. But Facebook is right to say that it is complying with UK law, which shows that the problem lies with our complex tax code, and that is what politicians should address as a matter of urgency.
“We have to ensure our taxes are simple to eliminate loopholes, and that taxes are low to increase our competitiveness, so that companies choose to base themselves here.”
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The “Google Tax” introduced by the British government in April 2015 was set in place to ensure corporations couldn’t divert profits into offshore accounts, which had become a major ploy utilized by businesses in order to not pay corporation tax in the region. However, despite this system having now been employed, there are still a variety of loopholes that exist which ensure that companies such as Facebook can employ underhanded schemes in order to get away with putting money into the country.
Facebook are morally responsible to pay the UK the tax from their profits, but at the moment they are not legally entitled to do so. That they got away with paying so little tax in the UK throughout the duration of an entire year is deplorable, and even more infuriating when you consider that in the two years prior, they paid no corporation tax at all.
Now seems as good a time as any for us to be played out by the Southampton buskers:
