Facebook Agrees to Pay Millions More in UK Tax After Widespread Criticism

By Aatif Sulleyman on at

Facebook, the multi-billion dollar company that paid just £4,327 in corporation tax in the UK in 2014, has agreed to alter its tax structure. Instead of routing all of its UK-generated advertising revenue through Ireland, the majority of it will be taxed in the UK.

It’s not yet know how much Facebook will need to cough up once the changes are officially made, but it’ll be many, many times more than what it’s currently paying. According to the BBC, the company’s first, higher, tax bill, will be paid in 2017.

“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,” reads a leaked internal memo. “What this means in practice is that UK sales made directly by our UK team will be booked in the UK, not Ireland.

“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."

It’s understood that smaller pieces of business will still be diverted through the Irish system, where its international headquarters will remain, but this certainly represents a step in a more moral direction. [BBC]