Facebook will pay £2.6 million in UK tax this year despite £842 million in revenue (FB)

mark zuckerberg facebook ceo

Facebook is to pay just £2.6 million in UK corporation tax for 2016, despite revenue quadrupling year on year to £842 million. Profit came in at £55.8 million for the year, up from a £41 million loss in 2015.

The social network has altered its business in the last year to book its UK ad revenues through its UK operation, rather than through a Dublin operation which pays less tax. The change was expected to generate millions more in tax for Her Majesty's Revenue and Customs. It's still an improvement on last year, when Facebook ended up with an £11.3 million tax rebate.

Notes to Facebook's 2016 accounts show that it actually has calculated a corporate tax bill of £5.1 million for 2016. However, it has calculated £2.7 million in deferred tax, mostly relating to stock-based compensation for employees. That brings this year's estimated tax bill to £2.6 million. Another note shows that, if Facebook paid 20% corporation tax on profits, its tax bill would total £11.7 million.

Facebook's accounts also show it has 960 employees in the UK, and that it paid out £104 million in wages in 2016. If you include £77 million in stock-based payments, the average wage comes to £188,500.

Facebook UK's parent company reported $26 billion (£20 billion) revenue for the full-year 2016, on profits of $10.2 billion (£7.7 billion).

Facebook's UK accounts come as regulators and governments take an increasing interest in how Silicon Valley's tech giants structure their businesses to pay minimal tax. The EU just slapped Amazon with a €250 million (£221 million) fine by the EU over its tax setup in Europe. The European Commission ruled that the company's tax deal with Luxembourg was illegal. Amazon said it would appeal the ruling.

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