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Avoidance or Evasion? How Facebook Paid Less Tax Than You Last Year

Sky News

We know, we know - it's not fair. Except, the trouble is, it is. Yes, that's right - Facebook paid less than the average UK worker in tax last year, and they did it legit. With a measly sum of £4,328 in corporation tax paid to the UK despite a £1.9bn global profit, the social media site is the latest in a string of multinational firms to be criticised for their bills.

Starbucks, Apple and Microsoft have also come under fire for their lack of pay to the government. With the average UK worker earning approximately £26,500, which means a tax contribution of £5393, many employed in Britain are paying more than the social media giant.

According to the company's accounts, this is due to the company operating at a loss of £28.5million in Britain due to a £35m payout to its workers in a share bonus scheme. A spokesperson for the company said: "We are compliant with UK tax law and in fact all countries where we have employees and offices. We continue to grow our business activities in the UK." But what is the difference between tax avoidance and evasion, other than one being totally legal and the other not?

Tax EVASION: under-reporting income, the use of illegal scheme to avoid paying tax, ie off-shore accounts
Tax AVOIDANCE: uses legal schemes to reduce corporation tax

Therefore by implementing tax avoidance schemes, the company avoids any legal obligation.

The news comes after Chancellor George Osbourne had pledged to limit tax avoidance schemes in the UK. He is purported to outline further proposals related to tax avoidance and evasion in December.

SMF rookie, fresh out of academia, looking forward to more creative ventures. With a love of current affairs, green tea and an ever insatiable wanderlust, Katie is ready to have her voice heard. Follow her @KatieAtSMF

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Avoidance or Evasion? How Facebook Paid Less Tax Than You Last Year Reviewed by Unknown on Tuesday, October 13, 2015 Rating: 5

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