Facebook has become the latest online firm to come under fire over the low level of tax it pays, after being charged just £15.8 million on £1.3 billion of turnover in the UK. The figure represents a little over 1% of its income. The company's accounts declared that while globally 40% of income was turned into profit, this only applied to 5% of UK sales.
In addition, the firm avoided further costs by giving its employees shares in the company, therefore claiming £8.4 million in tax credits to ensure its overall tax payment was a mere £7.4 million. Former Chairman of the House of Commons Public Accounts Committee Margaret Hodge MP said it is "absolutely outrageous that Facebook’s UK tax bill is 0.62% of their revenue here".
The news is in line with revelations of the low tax figures paid by other online retailers in the UK. Amazon, for instance, paid just £1.7 million on profits of £72 million. This has led to calls for a new tax on online sales and Chancellor Philip Hammond has pledged to act, with or without an international agreement on the issue.