Three charts that show just how low Facebook's corporation tax bill really is

Facebook UK's corporation tax bill for 2014 came out to less than the average British worker pays in income tax

Doug Bolton
Monday 12 October 2015 19:35
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The UK branch of Mark Zuckerberg's company technically ran at a loss last year
The UK branch of Mark Zuckerberg's company technically ran at a loss last year

Social media giant Facebook has faced criticism after it was revealed that it paid only £4,327 in taxes in 2014.

Even though Facebook paid its 362 UK employees an average of £210,000 in pay and bonuses, the company's corporation tax bill was less than the average UK worker pays in income tax.

Facebook uses entirely legal means to pay such a small amount of tax - by funnelling much of its advertising revenue to its Europe, Middle East and Africa headquarters in Dublin, where they are then sent to the tax haven of the Cayman Islands, a lot of the company's earnings are technically not made in the UK and so are not subject to corporation tax.

According to figures from DueDil, Facebook UK's most recent turnover (according to 2014 figures) was £105 million - however, in Ireland, the company turned over almost €3 billion (£2.2 billion) in 2013.

Speaking to the Sunday Times, Facebook said it is "compliant with UK tax law and in fact all countries where we have employees and offices."

Facebook's low tax bill was also due to a hefty loss it made in the UK - the most recent Companies House filing shows that Facebook made a loss of £28.5 million on its UK operations last year.

However, globally, Facebook is doing well. In July, it reported a global profit of $719 million (£468.5 million) in the second quarter of 2015 alone.

It's a slight fall in profits from the third quarter of 2014, when it made $806 million (£525 million) globally in the previous three months, but the figures are generally remaining steady.

And even though £4,327 of tax seems low, it's a higher figure than in previous years - in 2012, Facebook UK paid no corporation tax at all, according to The Guardian.

By 2013, that figure had risen to £3,169, before rising again to the current figure last year.

As reported by the BBC, Facebook UK recently signed a lease for a 227,324 sq ft office in cenral London, where a new headquarters is set to open in 2017.

And as Mark Zuckerberg announced recently, 24 August this year marked the first time one billion people had used Facebook in a single day, roughly equivalent to one in seven people on earth.

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