MPs in the Public Accounts Committee are set to turn their attentions to Facebook UK after its latest accounts showed the social network paid just £4,327 in corporation tax last year.
Labour MP and recently-appointed chairwoman of the PAC, Meg Hillier (pictured), confirmed committee members will discuss the company’s paltry contribution at their next meeting, with the option of summonsing the company’s executives.
She said in a statement: “We are keen to ensure every large corporation pays its fair share of tax and abides by the spirit, not just the letter, of the law. With the nation tightening its belt and further significant cuts indicated by the forthcoming spending review, the PAC will continue to follow the evidence on tax and look closely at issues raised.”
Facebook’s bonus scheme saw its UK staff take home an average of more than £210,000 last year in pay and bonuses and drove the social network’s corporation tax bill down to just £4,327.
The company made an accounting loss of £28.5m in Britain in 2014, after paying out more than £35m to its 362 staff in a share bonus scheme, according to its latest accounts.
The bonus scheme was worth around £96,000 to each employee. After salaries were factored in, staff took home an average of £210,000.
Booking a loss meant Facebook was able to pay less than £5,000 to HM Revenue & Customs for the year. Last year, Facebook made a profit on its worldwide operations of $2.9bn (£1.9bn), on revenue of $12.5bn. UK revenues were £105m last year.
A spokeswoman for Facebook said: “We are compliant with UK tax law, and in fact in all countries where we have operations and offices. We continue to grow our business activities in the UK.”
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Yet, KPMG’s annual survey shows that the UK is still an attractive place to do business, despite falling in rankings in tax competitiveness and FDI appeal
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