Facebook’s UK operations paid £28m in tax last year despite attracting a record £1.6bn in British sales.
The social media company’s latest UK accounts show that gross income from advertisers rose almost 30% last year to £1.65bn, and pretax profits surged by more than 50% from £63m to £97m.
Facebook UK said the net revenues it made from advertisers rose 50% last year to £797m, meaning 12% of its sales were converted to profits.
This falls far short of the company’s overall performance – last year, Facebook made $25bn (£19.7bn) of profit on total sales of $55.8bn – meaning it converted 44% of its sales into profits.
“Businesses across the country use our platforms to grow and revenue from customers supported by our UK teams is now recorded here so that any taxable profit is subject to UK corporation tax,” said Steve Hatch, the Facebook vice-president for Northern Europe.
Facebook’s UK operation expanded rapidly last year with staff numbers rising by more than 50%, from 1,290 to 1,965 year on year, with a total staff wages and pension bill of £431m.
The company’s UK office provides marketing services and sales and engineering support to other parts of the company. Facebook, which also owns the hugely popular Instagram and What’sApp social media services, said it spent £356m on research, development and engineering in the UK last year.
“The UK is now one of Facebook’s most important hubs for global innovation,” said Hatch. “We continue to grow and invest heavily in the UK and by the end of the year we’ll employ 3,000 people here. These high-skilled jobs are not only working on products like WhatsApp and Workplace but also help develop technology to proactively detect and remove malicious content from our platforms.”
Last month, the online retail giant Amazon came under fire for paying just £14.7m in UK corporation tax last year, despite reporting sales of £2.3bn.
Earlier this month, Netflix UK’s accounts showed that the streaming giant received a €57,000 (£51,000) tax rebate from the UK government last year, despite making an estimated £700m from British subscribers bingeing on fare from The Crown to Stranger Things.
Last year, Google paid £66.8m in UK corporation tax, up from £49.7m, as pretax profits rose from £200m to £246m. Google UK reported £1.4bn in revenues last year, up from £1.2bn. Apple paid £3.8m in tax on £1.2bn in sales last year.