tech spotlight

The social networking phenomenon boasts of rampant growth of registered users and advertisers but its official financial status update is very different. According to documents posted at companies house, Facebook UK generated revenues of just £20.4m last year and paid a paltry £238,000 in tax to the Revenue. Staff pay packages were bigger: the same filings show Facebook UK paid its 90 staff an average £275,000 each in 2011. Enders, the independent tech analysts, reckon the real UK revenues figure is £175m and its tax contribution should have been millions too. Facebook isn’t alone: Amazon, which sells one in four books in the UK, paid zero corporation tax on its £3.2bn UK sales. Google paid £6m on £395m. The tax arrangements have been branded “immoral”. At least they appear to fly in the face of the Government’s pledge to ensure that everyone pays their fair share, particularly big business. But they are entirely legal and within the rules. Facebook’s European headquarters is in Dublin, where corporation tax is a mere 12.5pc. In its accounts, Facebook UK describes its “principle activity” as “providing marketing and sales support” to Facebook Group, via the headquarters in Ireland. So if Facebook UK sells advertising here, it’s doing so on behalf of the Dublin office, through which all the sales flow. (via Why doesn’t HM Revenue poke Facebook? - Telegraph)

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