Facebook’s UK business paid just £8 million more in tax in 2020 than it did in the previous year, despite reporting a sharp jump in revenues and profits.
In its latest annual accounts, filed with Companies House this week, Facebook UK Limited confirmed that it paid £36.8 million to HM Revenue & Customs in 2020, compared with £28.6 million in 2019.
That was despite profits for the year surging by 64 per cent to £190.1 million against £115.7 million in 2019. Revenues rose to £1.37 billion, up 28 per cent from £1.07 billion the year before.
Facebook’s UK business provides sales support, marketing services and engineering support to the group, as well as acting as a reseller of advertising services to UK customers. A big jump in staff costs held back the division’s profitability as Facebook went on a hiring spree. It added more than 700 software engineers as well as 300 to its sales and marketing team.
It entered 2020 with 2,700 employees in its UK offices but finished the year with close to 3,750, on whom it spent £927 million, against the £634 million it incurred in costs the previous year.
Facebook UK’s tax would have ordinarily been £57.7 million. However, a £17.4 million deferred tax credit, along with £3.5 million set aside to account for the “impact of a previously enacted future tax rate”, trimmed its bill to £36.8 million.
The company said: “Over the last year we’ve continued to grow and invest heavily in the UK, and paid the required level of taxes under international tax rules. We understand there’s frustration about how tech companies are taxed and have long called for reform of the global tax system.”
Read more:
Facebook UK limits tax rise despite profits surge