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Facebook is going to pay a lot more tax in the UK

Mar 4, 2016, 14:49 IST

Facebook CEO Mark Zuckerberg delivers the opening keynote at the Facebook f8 conference on April 30, 2014 in San Francisco, California. Facebook is hosting the one-day developers conference for the first time since 2011, with over 1500 developers expected to attend.Justin Sullivan/Getty Images

Facebook is reportedly going to change its corporate structure so that it pays more tax in the UK, BBC News reports.

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The company used to route sales through Ireland so that it paid a lower tax rate, but the BBC reports that it's going to change its structure to book sales in the UK instead.

The BBC says that the change will mean Facebook pays more corporation tax in the UK than before. It's all going to change in April, and the first tax bill affected will be in 2017.

Not all sales will go through Facebook's UK office, though. Large deals will be routed through the UK, but small, automated ad sales will continue to be registered through Facebook's Ireland office.

It's likely that Facebook's decision to re-arrange its tax structure came after Google was criticised for a £130 million tax deal in the UK for the past 10 years of activity. Shadow chancellor John McDonnell claimed that Google's effective tax rate in the UK was 3%, instead of the normal 20% corporation tax.

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It was reported in November that Facebook paid just £4,327 in UK corporation tax in 2014. In contrast, British band One Direction paid £8.24 million in corporation tax in 2014.

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