Facebook paid £4.1 million in UK corporation tax last year, its accounts show. That’s a huge increase on the £4,327 tax bill it paid in 2014. However, BBC News reports that people still aren’t happy about the level of tax the company is paying.
The accounts show that Facebook UK posted turnover of more than £210 million, and taxable profit around £20 million.
The issue here is partly that Facebook’s UK accounts simply aren’t easy to read. Richard Murphy, a chartered accountant, told BBC News that “the Facebook UK accounts just record the costs it incurs in the UK, with a bit of profit added on to keep HMRC happy. That’s not good enough in the current climate.”
It’s not just accountants who aren’t happy with Facebook’s new tax bill. Alex Cobham, director of research at the Tax Justice Network, told The Financial Times “in practice, Facebook UK appears to have paid nothing in corporate tax to the UK public purse — less, even, than the £4,327 in 2014.”
What Cobham is referring to is the fact that Facebook actually received a tax credit of £11 million which it can use towards its tax bills in the future. That’s because of Facebook’s employee share purchase scheme.
Facebook has actually promised to make its accounts more transparent by ending the practice of routing its advertising deals through its Irish company. But that change isn’t covered in the 2015 accounts.
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