Facebook pay no Corporation Tax AGAIN

Facebook pay no Corporation Tax AGAIN

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Discussion

CamMoreRon

Original Poster:

1,237 posts

124 months

Thursday 23rd October 2014
quotequote all
http://www.theregister.co.uk/2014/10/22/facebook_u...

Apparently the reason being their UK wage bill was £49.8m for 208 employees. Making an average salary of a pretty tasty £239,500!

Of course.. complex international business structure and funnelling sales through Ireland having almost nothing to do with it..

mcflurry

9,079 posts

252 months

Thursday 23rd October 2014
quotequote all
AFAIK the Irish will be closing that tax break
(IANA-Tax-lawyer)

http://online.wsj.com/articles/ireland-to-close-do...

Mr_B

10,480 posts

242 months

Thursday 23rd October 2014
quotequote all
Something tells me its going to be less trendy to moan about FB than it is when you simply leave it as 'millionaires'.

CamMoreRon

Original Poster:

1,237 posts

124 months

Thursday 23rd October 2014
quotequote all
mcflurry said:
AFAIK the Irish will be closing that tax break
(IANA-Tax-lawyer)

http://online.wsj.com/articles/ireland-to-close-do...
That link requires a subscription. frown

I really hope they do.. they must be under some serious pressure from the countries they exploit with those special tax deals.

CrutyRammers

13,735 posts

197 months

Thursday 23rd October 2014
quotequote all
Mr_B said:
Something tells me its going to be less trendy to moan about FB than it is when you simply leave it as 'millionaires'.
Yes, I imagine so. Nasty Tories.

Megaflow

9,347 posts

224 months

Thursday 23rd October 2014
quotequote all
CamMoreRon said:
http://www.theregister.co.uk/2014/10/22/facebook_u...

Apparently the reason being their UK wage bill was £49.8m for 208 employees. Making an average salary of a pretty tasty £239,500!

Of course.. complex international business structure and funnelling sales through Ireland having almost nothing to do with it..
Not quite that simple. The average *cost* of employement is £239,500.

Now take out National Insurance, income tax, pensions, private health care, company cars, etc and you have the average salary. Which even then will be heavily skewed towards what the CEO, etc are earning.

Mrr T

12,153 posts

264 months

Thursday 23rd October 2014
quotequote all
CamMoreRon said:
http://www.theregister.co.uk/2014/10/22/facebook_u...

Apparently the reason being their UK wage bill was £49.8m for 208 employees. Making an average salary of a pretty tasty £239,500!

Of course.. complex international business structure and funnelling sales through Ireland having almost nothing to do with it..
Before posting there links can you please try to get a basic understanding of tax and finance.

Corporation tax is paid on profits not turnover.

I am not sure of Facebooks business structure but I do know it changes its users nothing. So all Facebook revenue comes from advertisers. So if Facebook servers are based Ireland and a UK company pays for an advert. The revenue is in Ireland the fact a user in the UK sees the advert is nothing to do with it.

As for the salaries I think you will find these are mainly share bonuses based on performance of the share price, and of cause are all subject to UK income tax.

BoRED S2upid

19,644 posts

239 months

Thursday 23rd October 2014
quotequote all
Doesn't surprise me I'm pretty sure Starbucks and the others will be exactly the same.

hornet

6,333 posts

249 months

Thursday 23rd October 2014
quotequote all
CamMoreRon said:
http://www.theregister.co.uk/2014/10/22/facebook_u...

Apparently the reason being their UK wage bill was £49.8m for 208 employees. Making an average salary of a pretty tasty £239,500!

Of course.. complex international business structure and funnelling sales through Ireland having almost nothing to do with it..
Spinning it round, you can be certain there are international businesses employing similar structures in order to pay corporation tax in the UK as opposed to their actual base of operation. If we are to condemn those playing the game to shift profits away from the UK, surely we should be equally vocal about those shifting profits towards the UK? They must surely exist

I wonder how much corporation tax the UK would lose if those morally outraged about Facebook, Starbucks et al were even handed in their condemnation and insisted we repatriate taxes received from businesses playing the exact same game, only to our advantage?

sugerbear

3,961 posts

157 months

Thursday 23rd October 2014
quotequote all
Can you name some so that I can be morally outraged.

DonnyMac

3,634 posts

202 months

Thursday 23rd October 2014
quotequote all
Mrr T said:
Before posting there links can you please try to get a basic understanding of tax and finance.

[...]So if Facebook servers are based Ireland and a UK company pays for an advert. The revenue is in Ireland the fact a user in the UK sees the advert is nothing to do with it.
It is my understanding that it has nothing to do with where the servers are based, it is where the advertising revenue is generated.

FaceBook have said that their uber sales people in the UK are not selling to UK businesses, but merely taking them out on expensive lunches for brand awareness or some such guff.

These companies that are wined and dined then become major advertisers with FB - the argument being that the sales paperwork is then handed to Eire, so the 'deal' was done in that tax regime not the UK where the multiple meetings and jollies with the non-sales people happened.

That is the argument for tax to be paid in the UK as the sales are being made here.

The server question isn't relevant to HMRC either as in digital businesses they tax where the 'service was enjoyed' this from a VAT perspective - Corp is on profit as you mention.


Foliage

3,861 posts

121 months

Thursday 23rd October 2014
quotequote all
Err, shouldn't the thread title be UK government allow facebook and other large corporations maximise their profits by not closing loophole that allows them to not pay tax.

Its the government that's the problem not the corporations.

Corporations = Make as much profit as possible
Government = Look after infrastructure and service for citizens


Which one is failing in their remit?

turbobloke

103,746 posts

259 months

Thursday 23rd October 2014
quotequote all
How much taxable-in-the-UK profit did FB generate?

DonnyMac

3,634 posts

202 months

Thursday 23rd October 2014
quotequote all
turbobloke said:
How much taxable-in-the-UK profit did FB generate?
None, because they say they're sales people arn't selling - all the paperwork is done in Eire.

Cheeky, cheeky.

Hackney

6,811 posts

207 months

Thursday 23rd October 2014
quotequote all
Foliage said:
Err, shouldn't the thread title be UK government allow facebook and other large corporations maximise their profits by not closing loophole that allows them to not pay tax.

Its the government that's the problem not the corporations.

Corporations = Make as much profit as possible
This Government = Look after mates who run corporations so they can make as much profit as possible

Which one is failing in their remit?
Fixed that for you.

Foliage

3,861 posts

121 months

Thursday 23rd October 2014
quotequote all
Hackney said:
Foliage said:
Err, shouldn't the thread title be UK government allow facebook and other large corporations maximise their profits by not closing loophole that allows them to not pay tax.

Its the government that's the problem not the corporations.

Corporations = Make as much profit as possible
This Government = Look after mates who run corporations so they can make as much profit as possible

Which one is failing in their remit?
Fixed that for you.
smile

turbobloke

103,746 posts

259 months

Thursday 23rd October 2014
quotequote all
DonnyMac said:
turbobloke said:
How much taxable-in-the-UK profit did FB generate?
None, because they say they're sales people arn't selling - all the paperwork is done in Eire.

Cheeky, cheeky.
OK, in which case unless HMRC don't accept that position, no corptax is due.

If HMRC want to fight it, they can. I imagine if they do, and the ultimate decision is that there is UK profit to be taxed, then FB will pay. At the moment the position would appear to be lawful which is all that matters.

At least the government can't waste what it never had.

waterwonder

995 posts

175 months

Thursday 23rd October 2014
quotequote all
hornet said:
CamMoreRon said:
http://www.theregister.co.uk/2014/10/22/facebook_u...

Apparently the reason being their UK wage bill was £49.8m for 208 employees. Making an average salary of a pretty tasty £239,500!

Of course.. complex international business structure and funnelling sales through Ireland having almost nothing to do with it..
Spinning it round, you can be certain there are international businesses employing similar structures in order to pay corporation tax in the UK as opposed to their actual base of operation. If we are to condemn those playing the game to shift profits away from the UK, surely we should be equally vocal about those shifting profits towards the UK? They must surely exist

I wonder how much corporation tax the UK would lose if those morally outraged about Facebook, Starbucks et al were even handed in their condemnation and insisted we repatriate taxes received from businesses playing the exact same game, only to our advantage?
This, as the UK has lower tax rates than most other large western economies we should be near the back of the queue when it comes to whinging about this sort of thing.

Criticising US corporations for using (legal) tax structures in Ireland is a complete hypocrisy when as a nation we encourage multi-nationals to do the exact same thing but using the UK to dodge higher taxes elsewhere.

Liszt

4,329 posts

269 months

Thursday 23rd October 2014
quotequote all
Also it's little things like FB UK is charged £millions for consultancy and other intangible services and fluff by FB Eire. FB Eire then pay the better tax rates and send the remainder to the shareholders of FB inc who own both FB UK and FB eire.

DonnyMac

3,634 posts

202 months

Thursday 23rd October 2014
quotequote all
turbobloke said:
DonnyMac said:
turbobloke said:
How much taxable-in-the-UK profit did FB generate?
None, because they say they're sales people arn't selling - all the paperwork is done in Eire.

Cheeky, cheeky.
OK, in which case unless HMRC don't accept that position, no corptax is due.

If HMRC want to fight it, they can. I imagine if they do, and the ultimate decision is that there is UK profit to be taxed, then FB will pay. At the moment the position would appear to be lawful which is all that matters.

At least the government can't waste what it never had.
Agreed; liked the last sentence.