Facebook Pays No UK Corporation Tax For Second Year
The usual lefties and liberals are up in arms about the fact that Facebook seems to have paid no corporation tax here in the UK for a second year. There’s a couple of really very impotant points they’re missing though:
Facebook paid no UK corporation tax for the second year in a row in 2013, while employees received shares in the company worth tens of millions of pounds.
The world’s largest social media company reported a pre-tax loss of £11.6m in the UK last year, despite its US parent company reporting a net profit of $1.5bn (£900m).
The company employed an average of 172 UK staff, who were paid £40.8m last year, almost double the 2012 figure of £21m.
This is because of a £15.5m payment cost for “share-based payments”.
UK staff received 1.52m free Facebook shares worth $118m at their current share price of about $78.
So, why didn’t Facebook make a profit in the UK? Because it gave out shares in the company to the employees. And over in leftyland we always thought that was a good idea: you know, the workers owning the means of production and all that? And Facebook UK has actually given the workers absolutely all of the value created in the company: the workers get the lot, the bastard capitalists none of it. So why isn’t there singing and dancing in the streets?
And there’s one other rather important point to make: those workers will have been paying 45% income tax on most of that money that they’re being paid. And if getting tax revenue is what you’re interested in that’s a rather higher rate than the 24% corporation tax rate for that year. And if you do care about the tax revenue then getting more tax is better than less, yes?
It’s just difficult to see why people are whining so much.