Facebook says it's LOSING money in the UK ... pays hardly any tax
90 costly employees put ads firm in the red
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. ®
Sponsored: Magic Quadrant for Client Management Tools