Facebook accused of creative accounting to minimize UK taxes

facebook accused of creative accounting to minimize uk taxesClearly, 2012 isn’t Facebook’s year. In addition to its public fall from grace in the wake of the company going public – with share prices plummeting immediately afterwards, and accusations about whether or not the company was overpriced at launch starting almost immediately – the social media giant is now being accused of failing to pay the correct amount of taxes due in the United Kingdom, and dramatically under-reporting its earnings for 2011.

According to reports, the British subsidiary of the company paid just £195,890 in tax to the British Government last year, despite paying its 90 employees an average of £275,000 each for the same period; the company also reported British revenue of £20.4m, a figure dramatically – and, it has to be said, somewhat suspiciously – below the £175m that analysts had estimated for the year. So what, exactly, is going on? The answer appears to be some creative accounting, and knowing where best to put the money to keep it safest (Hint: Not in the United Kingdom).

A large part of the puzzle may be that Facebook’s international headquarters are placed in Dublin, which means that they can take advantage of far lower corporate taxation rates; Richard Murphy, a chartered accountant with Tax Research UK, estimates that only around 11 percent of the company’s UK sales are being reported in its British returns, with the remainder being included in the Irish returns from the international HQ. He says that “Facebook is taking standard practice for these IT companies to a new high, or low, depending on how you look at it,” adding that in his opinion, the United Kingdom is “being taken for a ride” by the company.

To make matters more confusing, Facebook UK reports that it charged £15.4m to its 2011 accounts, essentially putting that amount towards future tax bills, despite only reporting £20.4m in revenue. As Murphy points out, “That makes no sense. The options must, of course, be based on the value of sales recorded in Ireland but the UK is bearing the cost of the tax relief on paying those options.”

Facebook UK was estimated to have made somewhere in the region of £175m last year, but actually reported a £10.2m loss. Embarrassingly, the company admitted that these numbers may not have actually told the whole story as to how the company was actually performing, releasing a statement to accompany the report of the loss that read “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.” An admission, perhaps, of the kind of accounting sleight of hand that the company is accused of?

When asked about the choice of Dublin as international headquarters, a company spokeswoman told the Guardian newspaper that the location “was selected as the best location to hire staff with the right skills to run a multilingual hi-tech operation serving the whole of Europe.” Clearly, the low tax rate was just an accidental benefit.


Apple’s interest in self-driving cars reported to be revving up

A new report suggests that Apple is in talks with a number of suppliers to purchase lidar sensors, an essential tool for self-driving cars. The news is once again spiking rumors that Apple might be building vehicles.

Mueller report releases on CD, forces Congress to find PCs with disc drives

The Mueller report was released this week to Congress via CDs and congressional members had to find PCs with working disc drives to access the 400-page document. The redacted report was also released to the public on a website.

Report says 20% of all 2018 web traffic came from bad bots

Distil Networks published its annual Bad Bot Report this week and announced that 20% of all web traffic in 2018 came from bad bots. The report had other similarly surprising findings regarding the state of bots as well.

Persona 5 The Royal rumored to have ‘a ton of new content,’ female protagonist

Persona 5 The Royal will be an enhanced version of the original game with a female main character and a lengthy epilogue, according to a GearNuke report. The website's source also revealed information about two more games based on the RPG.
Social Media

Looking to officially rid your inbox of Facebook messages? Here's how

Deleting messages from Facebook Messenger is almost as easy as scrolling through your News Feed. Here, we show you how to delete an entire conversation or a single message, both of which take seconds.
Social Media

LinkedIn: Now you can express love, curiosity, and more with new Reactions

LinkedIn is following in the footsteps of Facebook (three years later!) with the rollout of new reactions that give users more ways to express themselves when responding to posts in their feed.
Social Media

Twitter’s experimental Twttr app is even more popular than the real thing

Twttr, the new app that lets regular Twitter users test new features, is proving more popular than the main app, according to the company. The revelation suggests some of the innovations may land for all Twitter users soon.
Social Media

Messenger and Facebook, together again? Facebook tests integrating chats

Longing for the old days where Facebook and Messenger were one app? Facebook is testing an integrated chat option. While Messenger remains more feature-rich, the test brings some chat functionality back into the Facebook app.
Social Media

How to download Instagram Stories on iOS, Android, and desktop

Curious about how to save someone's Instagram Story to your phone? Lucky for you, it can be done -- but it does take a few extra steps. Here's what you need to know to save Instagram Stories on both iOS and Android.
Social Media

Facebook, Instagram, and WhatsApp went down worldwide for 2 hours this morning

Chaos erupted on the internet this morning, as Facebook, Instagram, and Whatsapp all went down from 6:30 a.m. to approximately 9 a.m. Thousands of users were unable to access the sites or send or receive Whatsapp messages.

Skype screen sharing for mobile will let you share your swipes on dating apps

Skype is prepping the launch of screen sharing for mobile so you can share your swipes on dating apps, shop with buddies, or, perhaps, show a PowerPoint presentation to coworkers. It's in beta just now, but anyone can try it.
Social Media

Facebook toys with mixing Stories and News Feed into one swipeable carousel

Facebook's News Feed could look a lot like Stories if a prototype the social media giant is working on rolls out to users. The design change mixes Stories and News Feed posts into a full-screen slideshow that users swipe left to navigate.
Social Media

No more moon showers as Facebook Messenger’s dark mode gets official rollout

Facebook Messenger launched a dark mode last month, but to activate it you had to message the crescent moon to someone. Now it's been rolled out officially, and it can be accessed in a far more sensible way — via settings.

Twitter has revealed a launch date for its handy hide replies features

Twitter has revealed a launch date for a feature that lets users hide replies to their tweets. The hope is that it will help the original poster filter out offensive or irrelevant content from conversation threads.