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Tuesday 9 October 2018

Murdoch Facebook Profit Hypocrisy

The Murdoch mafiosi are in full cry today, and the target, as so often recently, is Facebook. This time, it’s about profits and taxation, with the Times telling readers “Hammond urged to act over Facebook’s ‘paltry’ tax bill”, and the Sun howling, with customary lack of subtlety, “Fury at Facebook … SWEET F ALL … Tech giant made £1.2bn … just £7m UK tax paid”. As Sir Sean nearly said, I think we got the point.
And the supporting Sun article continued in the same vein. “FACEBOOK was branded ‘immoral’ yesterday after paying just £7.4million in tax last year despite sales of more than £1.2billion … The web giant’s initial paltry bill of £15.8million was slashed by more than half after it claimed a tax credit of £8.4million for giving shares to staff”. There was more.
Furious MPs demanded action over the US tech giant run by Mark Zuckerberg and expressed outrage that it was paying so little to the Treasury … Labour’s Dame Margaret Hodge, former head of the Commons Public Accounts Committee, said ministers were running scared of taking on the world’s biggest companies”. Margaret Hodge lecturing others about stumping up their taxes? Yeah, right. But do go on.

She added: ‘The likes of Facebook have to realise the depth of anger out there … What’s so selfish about this is they want a healthy, well-educated workforce and a first-class internet network here in the UK. That is all paid for by taxpayers - but they don’t seem to want to contribute to that”. If so, then Facebook is not alone, is it, Rupe?
For starters, when the Sun whines “Facebook’s tax bill is equivalent to 0.62 per cent of its UK revenue”, that is not how tax is levied on companies. As the Murdoch management know only too well. Nor is “Zuckerberg has a personal fortune of nearly £50billion” relevant. That’s just Rupe’s petty jealousy. The relevant statistic, which the Sun ponies up eventually, is “The California-based company’s UK results yesterday revealed profits rose by six per cent to £62.7million in 2017”. And that is the figure on which tax is levied.
News UK, which runs the Murdoch titles, knows all about this. The company was not taxed on its incomes of around £44.5 million shown in the 2017 accounts. After it wrote off a massive £588 million of investments, a loss before tax of over £589 million was declared, with the effect that well over £100 million can be offset from future corporation tax bills.

That Facebook’s UK revenue is over £1 billion is not relevant to calculation of its own corporation tax bill. That depends on the profit declared. The Sun can complain about claiming a tax credit. But the paper’s parent company is doing just that by declaring a loss after all those write-offs, which will, er, reduce any future tax bills.
Otherwise, the only complaint the Murdoch mafiosi appear to be making against Facebook is that Zuckeberg and his pals are rather better at making money than they are. Well, there’s a solution for that: get some half-competent management who aren’t having to shell out huge amounts on legal bills and damages for phone hacking cases that are all their own fault - as well as spraying money up the wall on failures like Sun Bets.

Time for Rebekah Brooks to admit that she’s not up to the job. End of story.
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Darren G said...

The total irony being that the quiters are using facebook staying in London as a brexit "benefit".

I think we can assume that the only reason Facebook,and probably also Amazon, choose London is because they did a deal with the government so that they do not pay tax.

Stand by for more of these where the ERG nutters turn the uk into their tax havens.

Anonymous said...

Murdoch and co can't be that stupid.

Must be the Russkis destabilising them. They're guilty of everything else. And if it isn't them, it'll be the Chinese or the Venezuelans, maybe even the Cubans.