Paypal Imposed With Additional UK Tax Bill

Paypal has paid out an additional UK tax that amounted to €3.1 million (£2.7 million) after its financial accounts revealed the results of a review that was conducted by HM Revenue & Customs (HMRC).

The additional tax bill resulted in the US payments giant forking out a total of €4.7 million in tax last year, up from the €181,749 that it paid the year before.

In the filing, Paypal said that the HMRC had been “reviewing the company’s direct tax position,” in a process which is now considered to be complete.

It stated: “As a consequence, the company has agreed and settled its outstanding liabilities and as a result is not subject to any current enquiries.”

A Paypal spokesperson refused to issue further comments regarding the matter.

The news was released after Philip Hammond, the British chancellor, revealed plans to put pressure on tech giants with a so-called digital services tax. He said that many of the tech companies channel sales through other countries such as Ireland to avoid paying a big tax bill.

Last Monday, it emerged that Facebook had tripled its tax bill in the United Kingdom for 2017 to £15.8 million. Last week, it was also revealed that Airbnb had paid just a shy of £600,000 in corporate tax in 2017.

Airbnb is also facing an investigation from the HMRC which concerns its operations and transactions between various company divisions, which could potentially result in litigation.

In a similar manner to Airbnb and Facebook, the UK business of Paypal, records its revenues from the services it provides to other divisions within the group as well as maintaining marketing and staffing budgets in the United Kingdom.

The revenues for the business increased to €36.8 million during the previous year, up from €33.8m a year earlier. The profit after tax of the company was able to reach €3.1 million, up from €1.1 million.