Facebook UK pays £29m in corporation tax despite record £3.3bn sales | Facebook

Facebook’s UK operations paid £29million in corporation tax last year despite posting record £3.3billion in revenue, while the average salary of its staff rose at £262,000.

The social media company’s latest accounts for its London-based arm showed advertisers’ gross revenue jumped more than 37% in the past year, from £2.4bn to £3.3bn. pound sterling.

Its parent company, Meta, which also owns Instagram and WhatsApp, is the second-largest player in the UK digital advertising market, after Google.

The Companies House filing for Facebook UK, which describes itself as a provider of sales support, marketing services and technical support to Meta Group, brought in £229.5million in pre-tax profits the year last. This represents an increase of more than a fifth on the £190m made by the company in 2020.

The company paid £29.8m in UK corporation tax last year, up from £36.7m the year before. Facebook said it spent £1.8 billion on sales support, marketing services and technical support services.

Facebook UK’s tax burden was £69.7m last year, but deductions, including a tax credit of over £32m, have meant the company has been paying significantly less .

“Over the past year we have continued to invest in the UK, including opening a new office campus in King’s Cross. [in London]said a Meta spokesperson. “While we paid $8.52 billion [£7.65bn] in corporate tax worldwide last year, and our average effective tax rate over the last decade was around 20%, under current rules the vast majority of that is paid to United States. »

While Meta is now eyeing job cuts amid slowing growth of big tech companies, its UK business has seen a wave of hiring last year.

Its workforce grew by 37%, from 3,745 to 5,148 employees, as the company signed leases on two new office sites and extended an existing lease in London.

As a result, Facebook UK’s staff bill soared 46% year-on-year to £1.35bn, with staff receiving £458m in share-based payments. The company’s UK staff earned an average of £262,000 last year, up 6% from £247,400 the previous year.

Like its tech counterparts Amazon and Google, Meta is often the target of criticism that it doesn’t pay enough tax in the UK.

Insider Intelligence analysts estimate that in total Meta took £6 billion in UK advertising spend last year.

In 2020, the UK introduced a Digital Services Tax, which levies 2% of gross revenue and aims to target large digital companies that generate huge revenues but record relatively low profits.

Next year it will be replaced by a new global tax system after the Organization for Economic Co-operation and Development brokered an agreement between 136 countries that will force large multinational companies to pay taxes in the countries where they do business and to commit to a corporate tax rate of at least 15%.

“While we pay the level of taxes required under international tax rules, we understand that there is frustration with the way multinational companies are taxed and have long called for reform of the global tax system” , said the spokesperson for Meta. “We hope to see further progress towards implementing the OECD tax agreement, which could mean companies like Meta pay more taxes, and in different places.”

Earlier this week it emerged that Google had paid £200m in UK corporation tax on pre-tax profits of £1.1bn in the 18 months to the end of December.

The company reported revenue of £3.4 billion for the period. Insider Intelligence analysts estimate that Google, which also owns YouTube, had total revenue of £8.6 billion in the UK last year.

Google UK’s more than 5,700 employees earned an average of more than £385,000 each over the 18-month period, thanks in part to nearly £1 billion in share-based payments.