Twitter’s UK arm books £1.24m tax bill, accounts show

The accounts show that Twitter UK’s taxes increased after several charges and credits from prior years were incorporated into the final total,  highlighting the complexity around the tax status of global technology firms, reports The Telegraph.

While the firm owed corporation tax of £1.05m on its earnings of £3.36m, an adjustment from prior years and changes to reporting periods meant it booked taxes of £1.24m in total, compared to a credit of £1.67m in 2014.

The UK business represents a tiny fraction of Twitter’s overall operations, with revenues of £76m compared to global revenues of $2.2bn last year. The British unit’s advertising revenues have more than trebled in the past two years, which has almost all been used to pay the cost of sales.

Twitter is one of a number of large companies which has come under scrutiny for using offshore accounting to avoid corporate taxes. In the past, it has been criticised for locating many of its activities in Ireland to take of advantage of a more generous tax regime – a strategy employed by many technology firms that lack a physical presence such as a factory in a particular country.

Last year the Organisation for Economic Co-operation and Development unveiled a new global rulebook to tighten up corporate tax laws in a move designed to close international loopholes.

Twitter UK’s pre-tax profits were barely changed for the year after the value of sales of advertising jumped 31pc to £76.2m.

Staff working for the firm shared a £12.5m “share-based payment” in the year, on top of a £17.6m wage bill, according to the accounts.