By OneWorldScam
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Facebook has been accused of taking the British taxpayer for a ride after experts suggested the company had depressed sales figures and that the website’s average UK employee earned more last year than the whole social media network paid the exchequer.

The British arm paid its 90 UK-based staff an average of £275,000 each in 2011 while contributing just £195,890 to the Treasury’s coffers, according to the firm’s latest accounts filed at Companies House.

The website also reported UK revenues of £20.4m, a fraction of the £175m that media analysts estimate the firm made in the UK in 2011.

Most of the sales are believed to have been booked in the firm’s international headquarters in Dublin, where they will attract lower corporation taxes.

Richard Murphy, of Tax Research UK, said: “The UK is being taken for a ride. Facebook is taking standard practice for these IT companies to a new high, or low, depending on how you look at it. The UK is giving the tax break and the Irish get benefit of all the tax on the sales.”

The chartered accountant added that the arrangement between Facebook UK and its Dublin office suggests that only around 11% of total sales made into the UK are declared in this country – a standard industry mechanism whereby a UK-based company is paid a commission for the sales it generates by a sister company located in a lower tax jurisdiction.

Furthermore, Facebook UK’s latest figures show that the company charged £15.4m to its 2011 accounts – which can be used to reduce future tax bills – as a cost of awarding its UK staff share options. Murphy said: “That appears to be £15.4m to reward £20.4m in sales. That makes no sense. The options must, of course, be based on the value of sales recorded in Ireland but the UK is bearing the cost of the tax relief on paying these options.”

 

Read More: guardian.co.uk

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