Facebook profits from UK sales are funnelled to its Irish headquarters and from there onto another organisation registered in the Cayman IslandsLast year Facebook paid its UK staff huge amounts in salary and bonuses, rivalling the leading banks such as Goldman Sachs in terms in remuneration. The firm has, however, been widely criticised with some suggesting that the packages are attributable to a corporation tax avoidance scheme.
In 2014, lucky UK-based Facebook employees took home an impressive package of salary, cash payments and other bonuses. Having spent a total of £76.2 million on wages and a further £35 million in a share bonus scheme, the 362 members of staff in Facebook’s London UK office enjoyed an average of £210,000 total earnings each last year.
This amount compares favourably with packages at some of London’s top banks such as Goldman Sachs, which this year reportedly gave each banker an average of £190,000 in bonuses.
Whilst no doubt a leading employer, Facebook has, as a result, come under criticism for these bonus and salary schemes which are considered by some to be part of an elaborate scheme to avoid corporation tax. The total amount saw the company end the year at an operating loss of £28.5million, resulting in a corporation tax bill of just £4,327; less than the average UK worker pays in personal tax each year.
Facebook profits from UK sales are funnelled to its Irish headquarters and from there onto another organisation registered in the Cayman Islands.
Last year Facebook also faced criticism after earning £2.3 billion in global sales and paying just £1.8 million in Irish tax. The debate surrounding large corporations and their tax bills has been running for some years, with major players such as Google, Amazon and Apple also coming under fire. So heated has the debate become that MPs have begun to voice concerns.
MP Margaret Hodge, who is chairperson of the Commons Public Accounts Committee, said the social networking company was, ‘still refusing to listen to the voice of public opinion’ and that it appears to be ‘using elaborate corporate structures and artificial devices for no purpose other than to avoid tax’.
Central to this debate, however, is the fact that these tax avoidance strategies are all within the limits of the law. A spokesperson for Facebook has said, ‘We are compliant with UK tax law and in fact all countries where we have employees and offices. We continue to grow our business activities in the UK.’
Whatever the reason for Facebook’s generous pay and bonuses schemes, the staff at its Euston headquarters will have no doubt appreciated their lucrative packages.
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