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October 10, 2016updated 29 Jun 2022 12:47pm

Big web companies under fire over UK tax

Web giants in retail and social media, eBay and Facebook, reveal corporation UK tax bills.

By Hannah Williams

Online retailer eBay paid just £1.1 million in tax in the UK in 2015, whilst Facebook paid a total of £4.16 million in UK corporation tax over the same period.

According to UK filings, eBay appears to have reduced its tax bill by using a corporate structure that routes advertising fees from hundreds of thousands of British sellers through and overseas company.

Overall, this shows that the group’s main UK unit generated revenues of £185m in 2015, with tax of only £1.1m.

Similar to that of Google, Apple and other multinationals, Ebay routes its income from customers in many of its largest markets, including the UK, through a European sales hub located in a tax-friendly country.

The income flows through controversial tax structures that ultimately wipe huge sums off tax bills.

In a statement in its annual report, eBay explained: “We benefit from tax rulings concluded in several different jurisdictions, most significantly Switzerland and Luxembourg. These rulings provide for significantly lower rates of taxation on certain classes of income and require various thresholds of investment and employment in those jurisdictions.”

Facebook’s main UK subsidiary accounts of 2015 shows a big increase from the £4,327 which was paid in 2014, due to the expansion of the business in the UK.

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In 2015 alone, Facebook employed 682 people in the UK, which was up from 362 in 2014. The company now has over 1,000 full-time equivalent staff.

The company’s global profits saw a total of $3.7bn in 2015 on revenues, 44% higher than the previous year.

A Facebook spokesperson said: “We are proud that in 2015 we have continued to grow our business in the UK and created over 300 new high skilled jobs. We pay all the taxes that are required to under UK law.”

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