7 March 2016
Can you believe the latest news from Facebook?
On the one hand, the tech giant is connecting people from all over the world, making huge social stands and impacting communities far and wide; on the other they are doing their level best to avoid paying the tax they owe in the UK.
Now, they’re pledging to hand out bonuses worth £280 million to British staff over the next three years to further slash their tax bill. That’s a lot of money! According to the story’s coverage today, that’s an average of £775,000 each – which would become taxable expenses for Facebook to offset against the tax they pay in the UK. It could completely wipe out their full tax liability for several years.
This isn’t the first time Facebook has let our country down when it comes to paying their fair share to business in our country. In 2014, Facebook in the UK paid a whopping £4,327 in corporation tax. WOAH! How can they possibly afford £4,000 in tax.
To put that into context, an average UK worker earning £26,500 would pay more than that in income tax; they’d be looking at paying around £5,393.
A global company paying less tax in our country than an average UK worker; unbelievable. But it is not going to change until the government makes a change to the law.
Facebook has recently hit the headlines because of its tax strategy and will now stop funelling profit through Ireland from 2017. But, when you think about this, that gives them a year or more to find another work around.
There is little difference between tax avoidance and tax evasion. Why there is this line between the two, I don’t know. If there wasn’t, and if big businesses paid the money that they owe to the country, we would have a significantly stronger country and economy. In my opinion tax avoidance is just a polite term for tax evasion.
Facebook isn’t alone. This is one in a long line of multi-national businesses avoiding paying what they owe. And, to add insult injury, some of these huge international businesses are given grants to set up business here, to create jobs or build properties. So, not only are they paying little or no tax, they’re being given money from the tax payers’ pockets too.
I hope to see the government clamp down on this. If they cut corporation tax here too, they would earn significantly more because less businesses would look to use these tax schemes. If you earn profit in the UK, you should pay tax on that profit. Imagine just how much stronger the UK would be if there was a fair tax structure in place for all businesses.
These tax-avoiding firms may claim that what they are doing is ‘by the book’ but it is about time that book was rewritten. It is well past the point where the government needs to step in and take action on this. We’re waiting.