Facebook paid £15.7m in UK tax last year, tripling the amount it paid in 2016. Companies House revealed last week that Facebook’s profits for its UK office rose 6.3 per cent to £62.7m in 2017, up from 58.4m a year earlier. Due to an increase in intercompany services and advertising, Facebook’s UK revenue has risen to £1.2bn, an increase of more than a third year on year.
The news follows a push by UK Chancellor Philip Hammond to put pressure on large tech firms by threatening a new tax called a ‘digital services tax’, which could tax revenues. These tech companies have been condemned for moving sales through other countries and paying modest amounts of tax in the UK.
The social networking giants are intending to expand its UK operations further, making several acquisitions in recent months, such as AI start-up in Bloomsbury and the development of a major new office near Kings Cross.
Steve Hatch, Facebook’s Head of Northern Europe, has said “The UK is home to our largest engineering base outside the US and we continue to invest heavily here. By the end of 2018 we will employ 2300 people in the UK and we are doubling out office space in London’s King’s Cross with capacity for over 6,000 workstations by 2022. We have also changed the way we report tax so that revenue from customers supported by our UK teams is recorded in the UK and any taxable profit is subject to UK corporation tax.”
If you’d like to discuss your tax affairs and find out what you need to do to comply, get in touch.