George Osborne has been told to "get a grip" on the issue of Netflix's UK tax contribution after it was revealed the entertainment streaming service paid no corporation tax last year, despite netting a revenue of over £200 million in Britain.
Labour's shadow Treasury minister Richard Burgon criticised the Chancellor closing 153 HMRC tax offices, suggesting it helped companies to "undermine" British business.
The report said the subscription fee paid by UK customers goes to Netflix International BV, based in Luxembourg until the end of 2014.
It is claimed that despite Britain being Netflix's biggest market in Europe, the company is paying income tax in Luxembourg and not the UK - a move which is not against the law.
Mr Burgon said:
Netflix currently has several million customers in the UK and is the home of series such as House of Cards and Orange is the New Black.
A minimum of £5.99 is charged for a monthly subscription but this can range up to £8.99 per month for its "premium" service.
But analysis by the Sunday Times revealed the British subsidiary of the accounts, Netflix Services UK, received an "income tax credit" of about £35,000.
The company, originally started in the US, reportedly said it is expecting to pay some corporation tax in the UK this year.
HMRC said that important work had been done to ensure companies pay their "fair share" of tax.
A spokesman said: "HMRC is clear that multinational companies must pay the tax that is due and we do not settle for less.
"The Government has led the way in taking action to ensure multinational companies pay their fair share of taxes, including introducing the diverted profits tax to make it harder for multinationals to divert profits out of the UK.
"We have also played a critical role in the OECD's project to reform the international corporate tax system to prevent tax avoidance."