Facebook UK paid 29m in corporation tax despite record 3.3bn sales

Facebook's UK operations paid 29 m in corporation tax last year despite reporting a record 3.3 bn in sales, while its average staff pay rose to 262,000.

Gross income from advertisers increased by more than 37% last year, from 2.4 bn to 3.3 bn, according to the latest accounts for the London-based arm.

After Google, Meta, which also owns Instagram and WhatsApp, is the second-largest player in the UK digital advertising market.

The Companies House filing for Facebook UK, which provides sales support, marketing services and engineering support to the Meta group, reported 229.5 m in pre-tax profits last year. This was an increase of more than a fifth on the 190 m the company made in 2020.

The company paid 29.8 m in UK corporation tax last year, down from the 36.7 m it paid the year before. Facebook spent 1.8 billion on sales support, marketing services and engineering support services.

The tax charge for Facebook UK was 69.7 m last year, but deductions including a tax credit of more than 32 m meant the company paid less.

Over the last year we have invested in the UK, including opening a new office campus in King's Cross in London, said a spokeswoman for Meta. The US paid $8.52 billion for 7.65 billion in corporation tax last year, and our average effective tax rate over the last decade was around 20%, but the vast majority of this is paid in the US under current rules. Meta is considering job cuts due to a slowdown in growth among big tech companies, but its UK operation was on a hiring spree last year.

The operation agreed leases on two new office sites and extended an existing lease in London as the workforce grew 37% from 3,745 to 5,148 employees.

Facebook UK staff bill went up by 46% year-on-year to 1.35 billion bn, with staff receiving 458 million in share-based payments. The company's UK staff earned an average of 262,000 last year, an increase of 6% from 247,400 the year before.

Like its tech peers Amazon and Google, Meta is often the target of criticism that it does not pay enough tax in the UK.

In total, Meta took 6 billion dollars in UK ads last year, according to analysts at Insider Intelligence.

In 2020, the UK introduced a digital services tax which levies 2% of gross revenues and aimed at large digital companies that make huge revenues but report relatively small profits.

A new global tax system will be introduced next year after the Organisation for Economic Co-operation and Development brokered a deal between 136 countries that will result in large multinational companies paying tax in the countries where they do business, and committing to a minimum 15% corporation tax rate.

Meta spokesperson said we understand there s frustration about how multinational companies are taxed and that they have long called for the reform of the global tax system, although we pay the required level of taxes under international tax rules. We hope to see more progress towards the implementation of the OECD's tax agreement, which could mean companies like Meta paying more tax, and in different places. It emerged earlier this week that Google paid 200 m in UK corporation tax on pre-tax profits of 1.1 billion dollars in the 18 months to end of December.

The company reported 3.4 billion turnover for the period. Analysts at Insider Intelligence believe that Google, which also owns YouTube, has 8.6 billion total revenues in the UK last year.

Over the 18 month period, Google UK's more than 5,700 staff earned an average of more than 385,000 per day, thanks to nearly 1 billion share-based payments.