Tuesday 27 September 2016

Facebook to stop routing big UK sales through Ireland, pay more tax in Britain

Ailish O'Hora and Andrew Woodcock

Published 04/03/2016 | 09:41

Mark Zuckerberg
Mark Zuckerberg

Social media giant Facebook has announced it will stop routing sales from major UK customers through Ireland, as ,many multinationals come under increased fire over their corporation tax bills.

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Facebook paid just £4,327 in UK corporation tax in 2014 and Facebook Ireland paid only €3.4m in corporate tax in spite of revenues rocketing by over €1.8bn to €4.83bn.

Facebook said in a statement that the new arrangement - which will start in April - would provide greater "transparency".

The move will mean the company will not rout advertising revenues from big clients like Tesco and WPP through Ireland with the higher tax bill being paid from 2017.

A Facebook spokesman said: "On Monday we will start notifying large UK customers that from the start of April they will receive invoices from Facebook UK and not Facebook Ireland. What this means in practice is that UK sales made directly by our UK team will be booked in the UK, not Ireland. Facebook UK will then record the revenue from these sales.

"In light of changes to tax law in the UK, we felt this change would provide transparency to Facebook's operations in the UK. The new structure is easier to understand and clearly recognises the value our UK organisation adds to our sales through our highly skilled and growing UK sales team."

(Additional reporting PA)

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