eBay UK tax bill increased by £7m after HMRC review

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The eBay UK tax bill for 2016 has been increased after a review by HMRC, the British tax authority. eBay has now agreed to pay an addition £7m. eBay has historically always strongly asserted that it is fastidious in paying all tax payable in all the locations it operates in around the world.

In 2017, whilst sales reportedly increased by £500m, declared profits available from business account filings for the subsidiary, where corporation tax is payable, were a relatively modest £20m. Its 2017 the tax bill came to £6m. In 2016, eBay paid only £1.6m in corporation tax on declared profits of £7.7m. This additional sum relates to profits in years before 2017.

HMRC declines to comment on what it terms as the tax affairs of “identifiable” individuals or organisations, but said generally:

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.

It has always struck Tamebay that eBay has got off relatively lightly when it comes to media scrutiny of its tax affairs over the years. The likes of Google, Starbucks and Amazon often seem to get much greater criticism and consternation. Part of that is doubtless down to the fact that, compared to some of the much more cunning organisations, eBay is relatively well-behaved. It seems likely that they could probably pay even less tax if they employed other tactics.

Multi-national companies manage to contrive such weeny tax bills by the way they structure their businesses. Often that can mean that a national subsidiary pays substantial licensing fees and marketing and brand bills to a holding company in order to shrink their declared profits.

As we’ve often said, and it stands true here, “the law has not been broken but maybe the law is broken.” Certainly, every business has a responsibility to owners or shareholders to minimise its tax liability in any legal way possible. Anything else would be remiss.

3 Responses

  1. Maybe now Ebay have got used to the fact that they should pay tax to HMRC like the rest of us. They enforce this practice onto oversees sellers on their platform abusing the UK tax system. Maybe they will start to see it isn’t good enough for oversees sellers to just fill in the company VAT number field on eBay, they actually have to pay tax to HMRC as well.

  2. Grinds my Gears Tax dodger stories

    Pennies really, they a tax dodger plain and simple….they are just as bad as Amazon who seem to get all the publicity, suppose they are responsible for thousands in poor working conditions also.
    Wider society pay for this and these companies really do bring nothing into in but take plenty out.
    As far as I am concerned change the law make them contribute or ban them from trading in the host country. They will be replaced.
    Think the EU is away to hammer them big time anyway…..

  3. eBay,Amazon are complicent in tax evasion and encourage lying duplicitous VAT evaiders stating they are UK retailers where in fact they are Asian mostly Chinese criminals using Marketplaces for devious trading ,It’s sophisticated money launderingThe UK needs to wake up to tax evasion ,It is no wonder the EU is fining us Our Revenue is NOT FIT FOR PURPOSE
    Only buy from legitimate UK traders CHECK IT OUT IF YOU DOUBT !


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