As reported in the media last week, Facebook have been accused of dodging UK taxes – should UK users hold a “Switch Off Facebook” day to demand they pay their fair share?
Whilst media analysts estimated that Facebook earned £175 million in advertising sales in the UK in 2011, they paid just £196,000 in UK tax. In fact, each of their 90 UK-based staff received more in pay – an average of £275,000 each – than the Treasury received in tax. It achieved this by declaring most of its UK sales in Ireland – where tax rates are much lower.
As tax justice expert Richard Murphy explained, “The UK is being taken for a ride. Facebook is taking standard practice for these IT companies to a new high, or low, depending on how you look at it. The UK is giving the tax break and the Irish get benefit of all the tax on the sales.”
Every pound Facebook and other major corporations dodge in taxes is a pound less to spend on essential public services, health, education and benefits – and the impact is increasingly being felt by individuals, families and communities across the country.
So is it time for Facebook’s 42 million users to hit back?
Facebook generates the bulk of its revenue using a ‘pay per view’ or ‘pay per click’ advertising. If Facebook users publicly ‘switched off Facebook’ for a day – and at the same time called on the company to pay its fair share of taxes – we would hit them where it hurts most: In the wallet.
Let me know what you think!