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Facebook to fork out more UK tax?

Friday, March 04, 2016 - 01:34

Facebook could pay millions of pounds more in UK taxes after changing its tax structure in the country. But, as Sara Hemrajani reports, the pressure is still on Britain's tax authorities to take a tougher line on multinationals.

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Could Facebook be set to foot a bigger tax bill in the UK? The tech giant is changing its UK tax arrangement by booking major advertising sales in the country. That's instead of reporting those revenues through Ireland, where corporate tax rates are lower. The shake-up follows Britain's new 'diverted profits tax', which aims to make shifting profits offshore less appealing. But some say companies like Facebook won't see a big dent in their bank accounts. Reuters correspondent Tom Bergin. SOUNDBITE: Tom Bergin, Reuters correspondent, saying (English): "Facebook is unlikely to pay materially more tax as a result of the changes announced today. Facebook paid less than $10,000 last year or in 2014 in the UK in tax. Even if its tax bill is multiplied by a factor of 10 as a result of these changes, it won't make very much difference to Facebook's finances, or indeed the net profitability of the UK market to Facebook." Despite recent changes, the UK's so-called 'soft touch' approach to multinationals is still fuelling public anger. SOUNDBITE: Tom Bergin, Reuters correspondent, saying (English): "Since Google's deal with the tax authorities earlier this year, we saw a parliamentary inquiry, we saw a massive public scandal. So it seems these deals often end up stoking more anger than they do quelling dissatisfaction among voters." Britain's tax authority says it doesn't comment on individual taxpayers but added it ensures all companies pay the tax due under UK law.

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