Facebook has been accused of cheating the UK out of tax payments after expert analysis suggested the company only reported some 11 per cent of its British revenue, according to the Guardian.
The social network is alleged to have reduced its sales figures, paying £195,890 in taxes on reported UK revenues of £20.4 million. But media analysts have said the company raked in £175 million in UK sales last year.
The company allegedly managed to dodge its UK obligations by setting up its headquarters in Dublin, where it takes advantage of tax breaks offered to corporations.
"The UK is being taken for a ride. Facebook is taking standard practice for these IT companies to a new high, or low, depending on how you look at it. The UK is giving the tax break and the Irish get benefit of all the tax on the sales,” said account Richard Murphy of Tax Research UK.
Though the practice is not illegal, one parliamentarian described it as “disingenuous and immoral.” Speaking to the Belfast Telegraph, Labour MP John Mann blasted companies like Facebook who deliberately avoid paying UK taxes.
“They benefit enormously from the country's internet infrastructure but do nothing to fund it. It's like driving a car with no tax. We would stand for it on our roads so why stand for it on the net?” he said, suggesting the introduction of a ‘traffic fee’ for Internet-based companies.
Predictably, Facebook denied the charges, insisting that it chose Dublin because of staffing opportunities there.
"We have our international headquarters in Ireland that employs hundreds and a series of smaller local offices providing support services all over Europe. Dublin was selected as the best location to hire staff with the right skills to run a multilingual hi-tech operation serving the whole of Europe,” said a spokesperson in response to the allegations.
Ernst&Young, the company behind Facebook’s UK auditing, has not commented on the accusations.