Facebook challenged over £11.3 tax credit 

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According to information filed at Companies House, Facebook paid £4.17m in corporation tax for the year to December 2015,  and recorded sales of some £210m.

However, the company also had a £11.3m credit to offset against future tax payments, as a result of being able to offset some £15.5m of payments linked to its bonus scheme.

Facebook paid £71m towards a share-based bonus scheme, the equivalent of £104,105 for every member of its UK workforce, which currently numbers 854. The bonus payment equated to £35m in the prior year.

The accounts show that Facebook UK made a loss of £52.5m before tax for 2015, on sales of £210.7m. This compared to £28.48m on sales of £104.9m in the prior year. Losses after tax stood at £41.17m in 2015 from £28.5m in the prior year

Following sustained criticism of its 2014 accounts, Facebook said in March this year that it would no longer route advertising sales through Ireland for its largest advertisers. Campaigners for tax equality said should mean the company paid considerably more tax in the UK, and claim the subsequent tax credit has undermined that commitment.

From 1 April 2016, Facebook set an advertising reseller business for large UK customers, which the company plans to expand in the future.

Principal risks for the business were identified as the emergence of rival social networks, security and privacy breaches, global recession reducing online advertising spend, user engagement and attracing and retaining talent.

The company reported under FRS 101, Reduced Disclosure Framework, and the accounts were audited by EY in Dublin.

A Facebook spokesman said: ‘We pay all the taxes that we are required to under UK law. We are proud that in 2015 we have continued to grow our business in the UK and created over 300 new high skilled jobs.

‘The UK is now home to some of the most innovative technologies in the world including our investment in a high tech solar powered plane centre in Somerset that will help bring the internet to remote areas of the world.’

The Facebook UK Limited annual report and financial statements for year ended 31 Dec 2015 is available PDF iconhere

Source: CCH Daily

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