Facebook pays less than £5,000 in UK corporation tax in one year

Credit: Reuters

Social network giant Facebook paid just £4,327 in corporation tax last year - £1,000 less than the average British worker.

According to analysis by the Sunday Times (£), the company gave £35m worth of shares to its British workers as part of a bonus scheme, pushing it into an accounting loss to pay the minimal tax rate.

A British worker on the UK national average wage of £26,500 pays more annually in income tax and national insurance.

Last year, Facebook made a global profit of $2.9bn (£1.9bn), on revenue of $12.5bn - £105m of which were made in the UK last year.

The analysis shows profits generated in the UK were sent to Facebook's international headquarters in Ireland, before being transferred to an account in the Cayman Islands, who do not collect corporation tax.

Facebook told the Sunday Times it was “compliant with UK tax law and in fact all countries where we have employees and offices. We continue to grow our business activities in the UK.”

Last week the OECD unveiled new measures to stop large companies from exploiting loopholes in the international tax system.

The new rules will make it harder for Facebook, Google and Apple to shift profits and will force multinationals to disclose how much revenue they generate in each country.

Margaret Hodge, former chair of the Commons Public Accounts Committee, told the Daily Mail Facebook was 'still refusing to listen to the voice of public opinion' adding that the company was 'using elaborate corporate structures and artificial devices for no purpose other than to avoid tax'.