AirBnB Only Paid £188,000 in UK Tax Last year

By Tom Pritchard on at

In another instalment of 'big companies getting away with paying fuck all tax' it's been revealed that rental service AirBnB only paid £188,000 in corporation tax last year. That's £8,000 less than it paid in 2015, and despite the fact it collected over £657 million in rent payments.

According to BBC News AirBnB has two UK subsidiaries, but the bookings are booked through another subsidiary that based in, surprise surprise, Ireland. One of the UK subsidiaries did make a pre-tax profit, but the other did not have to pay corporation tax because of various deductions that resulted in a loss.

The profitable subsidiary is AirBnB Payments UK, which handles payments for landlords renting to travellers from countries other than the US, China, and India. It made £960,000 in profit, and paid £188,000 in corporation tax. AirBnB UK, the other UK subsidiary, which markets AirBnB to British customers, made £463,000 in pre-tax profit. But because it gave out shares to its staff, which are tax deductible, everything worked out as a loss overall.

It's worth pointing out that the £657 million of rental payments won't be all the money AirBnB takes in. Most of that money will go to landlords, while AirBnB takes a percentage for itself. According to the AirBnB's website, it charges 3-5 per cent on accommodation bookings and 20 per cent on 'experiences'. It also charges travellers various fees that don't go to the landlord.

How much it earned from UK bookings isn't clear right now, but since the bookings are booked through an Irish subsidiary it means UK taxes don't apply. And Ireland is notorious for being friendly to big corporations, just ask Apple.

In a statement, AirBnB said, "We follow the rules and pay all the tax we owe. . . . Our UK office provides marketing services and pays all applicable taxes, including VAT. The Airbnb model is unique and boosted the UK economy by £3.46bn last year alone."

Forgive me for being blunt, but that's what all big companies say when they're caught not paying very many taxes. That does beg the question though, is the problem with companies deliberately pushing sales through another country to avoid taxation or is it because the government is letting this stuff slide? Is it a bit of both?

Either way it can't be a good thing for big, profitable companies to get away with paying very little tax. I have to pay taxes, why should they get away with it? [BBC News]

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