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Facebook agrees to pay millions more in UK corporation tax following criticism of Ireland arrangement | |
(35 minutes later) | |
Facebook is expected to pay millions of pounds in tax to the British Government after years of criticism over its arrangements. | |
The BBC reports that income from its largest advertisers will now be taxed in the UK after the company stops routing profits through Ireland. | |
The revenue will then be subject to corporation tax, of which Facebook paid just £4,327 in 2014 despite an annual profit of £1.9 billion. | |
Changes will reportedly be put in place in April, with the first, new tax bill to be paid in 2017. | Changes will reportedly be put in place in April, with the first, new tax bill to be paid in 2017. |
It was revealed yesterday that HMRC pays Facebook six times the amount the company pays in tax to buy adverts telling people to pay their taxes. | |
A Freedom of Information request by Channel 4 News revealed the company was paid £27,000 by HM Revenue and Customs (HMRC) last year. | |
“Like all large organisations we find that an increasing number of those we serve communicate through and get their information from social media," a spokesperson for HMRC said. | |
"Our investment in social media is carefully evaluated to ensure we are getting maximum value for the taxpayer." | |
Facebook is just one of a long line of multinational firms to be criticised over the size of their UK tax bills, with Google, Starbucks and Amazon also coming under fire. | |
The Chancellor, George Osborne, pledged to crackdown on tax avoidance by introducing a "diverted profits tax" to penalise companies that move their profits outside of the UK to countries with lower corporation tax rates in order to pay less to the Treasury. | |
The penalty, nicknamed the "Google Tax", came into effect in April last year. | |
Facebook has not yet responded to The Independent's request for a comment. |