An HMRC review led the UK subsidiary of PayPal to dole out extra money by way of tax amounting to a cool 3.1m EUR. This information came to light through BBC’s ‘Wake up to Money’s research which recorded a jump in their tax payments to a staggering 4.7m EUR from 181,000 EUR in 2016.
PayPal explained about the ongoing review by HMRC into its direct tax status while filing its accounts and disclosed that in conformity had made the outstanding payment. So, now it would not undergo further inquiries.
In this context, HMRC spokesman stated that they ensured no large is business indulged in tax avoidance and that they paid their dues in full. He also stated that they refrained from commenting on detectible taxpayers.
No comment was available from PayPal Europe, Africa and Middle East in this regard.
Chancellor Philip Hammond had taken up the subject of issuance of new tax for tech giants pushing sales via countries other than UK and in consequence making modest tax payments in the country just the week earlier.
The issue is being discussed within the Organization for Economic Co-operation and Development but its 36 members have failed to reach any agreement.
While delivering a speech at the Conference of the Conservative Party, Mr Hammond stated that it was time for taking a concrete action in this regard and felt that avoiding the issue was no solution. If there was no agreement in sight, then the UK would single-handedly charge its own ‘Digital Services Tax’.
A similar hike in corporation tax was witnessed in the accounts of Twitter UK which rose to 2.4m pounds from 815,000 pounds in 2016. However, as per the explanation given by the company, it pertained to earlier years’ adjustments rather than any intervention by HMRC. The profits for its UK division registered a drop by 3.7% amounting to 2.5m pounds and revenues amounted to 77.4m pounds, a drop of 2.5%.
As for PayPal UK, the pre-tax profit registered an increase of 6.6m EUR from its earlier 1.2m EURin the previous year. The revenue increased by 8% amounting to 36.7m EUR. The additional tax payment of 4.5m EUR was done via an ‘affiliated entity’.
Around the same period, PayPal Inc. disclosed $13bn as its revenue figures and $2.2bn as its pre-tax income. The Nasdaq-listed company in New York failed to provide separate figures for Europe or UK.