Until April, all Facebook’s UK advertising sales were routed through its operations in Dublin, reducing the UK tax bill. Activities at Facebook UK, meanwhile, were confined to selling “sales support, marketing services and engineering support” to other companies within the Facebook group.
But in that month, Facebook’s UK sales activity was transferred from Dublin to London, following the then chancellor George Osborne’s introduction of a punitive rate of tax for multinationals deemed to be artificially shifting British sales overseas.
Ahead of the change, turnover at Facebook UK Ltd doubled in 2015 to £210m, but this did not include a penny of the hundreds of millions of pounds in sales income that the wider group is estimated to have received from British advertisers.
Losses for Facebook UK increased from £28.5m to £52.5m in 2015. As a result, the accounts showed that Facebook UK ended the year with a tax credit of £11.3m, compared with a tax bill of £4,327 in 2014.
This closing the tax gap is hard, innit?