Facebook will be scrutinised by MPs over corporation tax
Members of an influential parliamentary committee will be looking into Facebook, after it was revealed that the social media giant paid just £4,327 in corporation tax last year.
Meg Hillier, the MP for Hackney South and Shoreditch who recently took the reins of the Public Accounts Committee (PAC), has confirmed that backbenchers on the committee will talk about Facebook at their next meeting – opening up the possibility for a future grilling of the company's top executives.
Hillier said: "We are keen to ensure every large corporation pays its fair share of tax and abides by the spirit, not just the letter, of the law."
“With the nation tightening its belt and further significant cuts indicated by the forthcoming spending review, the PAC will continue to follow the evidence on tax and look closely at the issues raised.”
Read more: Facebook's UK tax bill cost less than this annual commute
The public spending watchdog has a history of bringing in a number of high-profile chief executives for questioning over tax issues. HSBC chief executive Stuart Gulliver and the bank's chairman Douglas Flint both faced the committee earlier this year.
Facebook has come under fire since it was reported over the weekend that the company paid next to no corporation tax last year. The social networking site saw losses of £28.5m in its UK business, according to its latest accounts, up from £11.6m the year before. Revenues hit £105m in 2014, more than double the previous year.
The company's finances go largely through its European headquarters in Ireland, where it is able to minimise corporation taxes through the so-called "Double Irish" loophole. Facebook reported profits of $701m and revenue of $12.5bn across its entire business last year.
A Facebook spokesperson 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.”