Just days after Chancellor George Osborne hailed the government's deal with Google as a "major success", the chancellor appears to have another large-scale tax dispute on his hands with yet another tech giant. This time Facebook will bring the fight after it emerged the social media company has earmarked some $2bn (£1.38bn) to settle global tax rows without intending to hand over a penny to Britain.
In 2014, the company paid just £4,327 ($6,643) in corporation tax in the UK and it is now challenging a HMRC audit looking into its operations between 2010 and 2014, according to a report in The Times. Facebook's affairs are once again in the spotlight after it became apparent on 31 January that the company kicked up just 4% – or $123m (£86m) – of its global profits of $3.4bn (£2.4bn) in tax last year.
Facebook said it would "defend any and all such claims" raised by the British tax authority as part of tax checks and added that it was "possible, but not probable" that it would be required to make further payments. The stark figures underline mounting frustration from the public over corporate tax avoidance by huge global companies.
As tax avoidance increasingly takes centre stage, shadow chancellor John McDonnell said: "It would be very worrying if yet another multinational technology company got an easy ride from the British taxman". He added: "Now we know that Facebook has set aside this money, George Osborne must make sure Britain gets its fair share."
Osborne was roundly mocked for declaring the government's tax deal with Google a "major success". The search engine giant agreed to pay £130m ($187.5) – or a tax rate of 3% – in a decade's worth of backdated taxes.
A Facebook spokesperson said: "We are always in discussions with tax authorities in the countries in which we operate and this is a normal part of doing business for all large companies."