Facebook published its 2017 accounts in the UK, showing that its tax bill had risen to £17m after it had changed its structure to book more revenues onshore. However, as Taxwatch director George Turner told the Independent, Facebook’s real profits in the UK are likely to be much higher.
We’re used to thinking of offshore tax avoidance and evasion as an elite, exclusive world of Swiss bank accounts and Caribbean law firms. But increasingly it involves anonymous social media channels and online consultations offering offshore entities set up online in minutes, privacy-enhanced cryptocurrency, and multiple passports. UK regulation hasn’t caught up with this reality.
According to HMRC figures released this week, small businesses are underpaying £37bn of due tax every year – roughly the replacement cost of Britain’s nuclear submarines. But this giant figure, already driving resource decisions, rests on an analysis of just 337 tax returns. And much of the missing tax may be accountants getting tax returns wrong, not high-street criminality and deliberate tax fraud.