Feeds

Facebook says it's LOSING money in the UK ... pays hardly any tax

90 costly employees put ads firm in the red

High performance access to file storage

Facebook's UK operation plunged to a £13.9m pre-tax loss in 2011, compared with a £1.1m profit a year earlier, accounts filed with Companies House revealed.

The dominant social network blamed a "share based payment charge" of more than £15m last year. It said that profit before tax that excluded that payment stood at £1.5m for the year.

But the company swung to a big loss in Blighty to cover ballooning staff costs even though it only conservatively bumped up its workforce by nine employees during the 12 months. As of 31 December 2011, Facebook had 90 people working at its UK headquarters in London.

The filing shows that it spent nearly £25m on wages and employee costs in Blighty last year. The massive £15m share based payment is understood to be related to income tax and national insurance on shares Facebook staffers bagged ahead of the company's infamous IPOcalypse.

A year earlier, staff costs totalled £7.8m. As noted elsewhere this morning, that means that each member of staff at Facebook's UK division cost the company around £275,000 in 2011.

Facebook's European headquarters are in Dublin, Ireland. Researchers at Enders Analysis have estimated that Facebook brought in ad sales of around £175m last year. At the same time, the company's tax payments fell from £424,651 in 2010 to just £238,317 last year. Of which, £185,196 was corporation tax.

It's a move that has inevitably led to allegations of tax avoidance against Facebook.

The company told the Evening Standard, which was first to report Facebook's latest UK accounts, that the "information does not necessarily present a full account of overall global financial performance so it would be a mistake to draw any conclusions from these filings."

In August, Facebook - on the lookout for new revenue streams - opened up its network to gamblers wanting to play online via the service in the UK. ®

High performance access to file storage

More from The Register

next story
Sorry London, Europe's top tech city is Munich
New 'Atlas of ICT Activity' finds innovation isn't happening at Silicon Roundabout
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.