Ebay hit with £7m extra UK tax bill after a review by HMRC

E-commerce auction site Ebay’s UK office paid out an additional £7m in owed corporate taxes last year, after the closure of a review by HM Revenue & Customs (HMRC).

In accounts published yesterday, Ebay UK paid a total of £13.5m in tax in 2017, £6m of which was for last year alone, on profits of £20m and £585.2m in revenue. A year earlier, Ebay paid just £1.6m in corporate tax.

A spokesperson for HMRC said that while it would not comment on identifiable taxpayers, it added:

“HMRC has a very strong track record on challenging contrived tax arrangements. We make sure that large businesses, just like everyone else, pay all the taxes due under UK law and we don’t settle for less.”

An Ebay spokesperson said the firm complies with all the relevant laws and rules of every country it operates in, including the UK.

Read more: Airbnb reveals its UK tax bill amid Tory calls for a digital services tax

The news follows the publication of accounts for fellow online tech giants Airbnb, Facebook and Paypal, which also all paid relatively small amounts of corporate tax in 2017.

City PM revealed last week that Airbnb’s total UK tax bill came just shy of £600,000 for the year, while an enquiry by HMRC into the business is ongoing. Facebook, meanwhile, tripled its UK tax bill to £15.8m while Paypal was required to pay out an additional £2.7m following a similar HMRC review.

It comes as the European Commission said it could reach a deal with such companies by Christmas that would lead to them paying increased taxes in Europe next year. In February, the EU proposed a three per cent tax on global internet firms with annual revenues of £660m or higher.

Read more: Facebook triples its UK tax bill to £15.8m

The international push for corporations to pay more taxes is expected to create additional pressure on chancellor Philip Hammond, who also laid out proposals for a new technology tax during his Conservative party conference speech earlier this month.

Proposed as a levy on digital services, Hammond said it would be necessary for the UK to “go it alone” in an effort to “regenerate capitalism”.