Facebook to pay back millions and change tax structure

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Facebook is now to pay millions of pounds in UK tax after a major over haul of its tax structure.

The BBC have revealed that the profits from the large majority of Facebook’s advertising revenue in Britain will now be properly taxed in the UK.

Previously, a lot of this income was routed through Ireland, meaning that they weren’t paying as much tax as they arguably should have been.

It was mainly for the larger advertisers on the social media, such as Tesco and global advertising company WPP.

Some of the smaller business transactions, which barely use any Facebook staff or admin, will still get routed through Ireland, but hopefully the change to the biggest business deals will help to put money back into the UK economy.

However, it is reported that the first higher tax bill will be paid by Facebook in April 2017, giving a year until the economy sees that influx.

The whole controversy lit up when it was uncovered that in 2014, Facebook paid just £4,327 of corporation tax in the UK, even though the UK is one of the biggest markets outside of the USA.

Similarly, there was an issue with Google earlier this year the when they had to pay back a huge amount of tax to the UK economy.

Large tech giants such as Facebook and Google hold an enormous amount of power and influence, and it can be difficult to get them to comply. A case in point would be the ongoing struggle between Apple and the FBI over whether the tech giant should create a back door for them into iPhones.

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