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HMRC's Facebook Ads Spending Outweighs the Network's Tax Payments

It's unsurprising that Facebook have been paying less in taxes than they perhaps should have. It's a big corporation and many people are aware that many companies may try and pay as little tax as possible. Facebook have done this by routing their data through Ireland instead of the UK.

Facebook only paid £4,327 in tax between the years of 2014 and 2015, which was tiny compared to the fact UK staff were taking home an average of £210,000 for the same period of time. This does suggest that they should be paying a lot more tax; Facebook have admitted to this and have put plans in place to make a change. Facebook will now be doing business with their bigger customers through the UK rather than Ireland. This includes companies like Tesco and Sainsburys, companies who are mainly based in the UK themselves. This means that Facebook should have to pay millions more in taxes but for smaller companies they aren't changing anything. So if you run a small company that buys ad space on Facebook, the letters you get will still be addressed from Ireland.

What really stands out about this story though is when you see how much the HMRC were paying Facebook themselves for advertising space. Obviously Facebook and other social media are great places for advertising as adverts tend to be targeted and it means a wider group of people will end up seeing and hopefully clicking on the adverts. But I can't help but think it's strange that they didn't notice that they were actually paying Facebook more for the adverts then they were being paid in tax. Surely that would ring a few bells? Perhaps it did but they weren't actually able to do anything about it. The HMRC paid Facebook paid £27,000 in ad space across a period of a year. It's a staggering number and it makes you wonder how much they're paying to advertise elsewhere because I haven't exactly seen their ads very often.

Now Facebook have owned up the issue and are currently building a new office in London, it seems as if their taxes are all straightened out. It seems like they should possibly route all their business locally through the UK but they can't be forced to do that. Many people are saying that this change is still pointless because many other companies are going to be cheating the tax office just so they don't have to pay out large amounts. Even Google looks as if it could get in some trouble over taxes so maybe they should take a leaf out of Facebook's book and act now.

For now though, there isn't much the HMRC can actually do. What Facebook were doing wasn't technically illegal and they're paying that extra tax now but it's going to take another year or longer to actually see if this change made a difference.

Rosina is a Songbird rookie with a degree in Creative Writing. She's trying to focus on her novel on the side but is hoping that Content Writing will turn out to be a good career choice in the mean time! Follow her @RosinaAtSMF

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HMRC's Facebook Ads Spending Outweighs the Network's Tax Payments Reviewed by Unknown on Monday, March 07, 2016 Rating: 5
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