If a company with a turnover of approximately £50 Million and increasing revenue in the UK pays only £3,169 of corporation tax, the position of the government in trying to introduce "the diverted profit tax" becomes understandable.
The world’s largest social media company reported a pre-tax loss of £11.6m in the UK last year, despite its US parent company reporting a net profit of $1.5bn (£900m). UK revenues rose from £34.6m to £49.8m, according to Facebook UK’s latest financial filing at Companies House published on Wednesday. Facebook UK classifies its turnover as “marketing and engineering services”, because much of the company’s ad revenues are funnelled through Ireland to take advantage of much lower tax rates. The company made £371m in advertising revenue last year, a 67% year-on-year rise from the £222m in 2012, according to research firm eMarketer. Facebook UK incurred a corporation tax charge of just £3,169, and received a credit of £182,000.