The top 5 Internet firms in the UK, Apple, Amazon, Google, eBay and Facebook, have been accused of avoiding some £650m in UK corporation tax during 2010, according to a news report.
Source: The Daily Mail
The Daily Mail reports that the big five internet firms paid 0.8% corporation tax on UK profits. However, the firms are using entirly legal means to do so, under EU law.
The firms used a process of legally taking payments via offshore companies. Amazon sells everything to all European countries via one company in Luxembourg. The other four, Google, eBay, Facebook and Apple, sell everything through their Irish companies.
Figures from the companies’ American filings suggest that the five made revenue of £12.2bn in Britain in 2010 from British consumers and advertisers.
On the basis of their global profit margins for the year, that would mean profits for the five from sales to British customers would have amounted to almost £2.5billion. Corporation tax at 28 per cent would have seen them pay £685million.Instead, subsidiaries established by the five in Britain paid just over £19million in 2010, or 0.8 per cent.
However, this system is part of EU to make it easier to do business right across Europe with only one legal establishment, in a bid to cut down on beauracracy.