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How much does multinationals pay in taxes in the UK?

There’s so much attention on the taxes paid by multinationals in the UK because of the fuss created in the media by the small amount of tax paid by Starbucks even though they operate 791 coffee shops in this country. Facebook are another firm who don’t pay a lot of tax to the government either. In fact, they pay less per year to the government of the UK than the average worker.
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Facebook

Elaborate corporate structures in place within lots of multinationals mean that firms like Facebook only pay around £4,000 in corporation tax per year. Facebook has over a billion users. It earns close to £105 million in Britain alone yet it pays out around £1,000 less per year than the average UK-based worker. This situation is allowed to occur because Facebook claim that they’re operating at a loss in the UK. Their balance sheet shows that they’re in the red to the tune of £28.5 million. The issue here isn’t that Facebook are operating at a loss but that they handed out £34.5 million in shares to their UK workers in lieu of bonuses which ensured that the firm made a “loss”.

Starbucks

The high street brand Starbucks is another multinational firm whose UK operation apparently doesn’t make a profit. According to their balance sheet, they took 17 years to make a profit in the UK when they turned in a £1million return in 2014. Reports suggest that the coffee shop chain has allowed its successful British arm to send money to failing parts of the business in order to lower their tax burden. Starbucks UK has produced cumulative sales amounting to more than £3 billion in the UK since opening but they’ve only pay out £8.6 million in corporation taxes over that period.

Future

The way that the profit is represented, where it’s sent before its declared and other very clever practices appears to be robbing the British economy of money so the government are tightening up on the process so that multinationals pay the amount of tax they accrue on the sales we consumers give them in the UK.

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