Thu 12 Oct 2017, 14:37 PM | Posted by Odds and Ends
The disgraceful behaviour of Netflix and eBay in dodging UK taxes has been revealed in this morning’s Financial Times (October 12 2017). Between them, these two giant companies managed to pay the Exchequer only £1.9m in taxes last year.
The tax of Netflix has actually fallen by 39 per cent to less than £300,000. The dodge they use is to book all their subscription revenue through the parent company, Netflix International BV, based in Holland. According to Ampere Analysis, a research firm based in London, Netflix had an estimated revenue from subscriptions of about $520m last year, about 20 times the figure filed by the company.
The taxes paid by eBay – only £1.6m – are based on a reported profit of only £7.6m and revenue of £200m in 2016. However, eBay has previously told the US authorities that its UK revenue was more than $1.3bn last year. The dodge eBay uses is to describe its UK revenue as that only coming from marketing and advertising services to eBay’s Swiss entity.
These tax dodgers are depriving the UK Exchequer of hundreds of millions and they are matched by similar dodges by dozens of other companies. Tax-dodging is done on an industrial scale by multinationals, using complex ownership structures to hide or justify what they are doing. In a statement to the FT, eBay commented, “In all countries and at all times, eBay is fully compliant with national, EU and international tax rules…” Exactly. All legal. And morally indefensible.
Don’t expect the Tories any time soon (or ever) to do anything about this.
