Netflix paid €441,775 (£399,551) in UK corporation tax last year amid pressure on US tech giants to increase their returns to HM Revenue & Customs.
The online video service behind “Stranger Things” and “House of Cards” published the figure in a Companies House earnings statement. The earnings were first reported by The Guardian.
In the 12 months to December 2015, Netflix posted revenues of €40.5 million (£36.7 million). This generated a pre-tax profit of €1.99 million (£1.8 million), on which it paid €441,775 of income tax.
The reason Netflix reports its UK earnings in Euros is because its parent company is Netflix International BV, which is based in the Netherlands. Netflix Services, the UK holding company, was incorporated in June 2014 – two years after the streaming service launched in Britain.
It is estimated that 6.5 million of Netflix’s 80 million global subscribers are in the UK, but the company said all revenue booked in Britain is for the “provision of marketing services.” The Times estimated that Netflix’s true UK turnover was £200 million ($243 million) in 2014, but most of this was booked overseas. Netflix is on track to make $8 billion (£7 billion) in global revenues this year.
A Netflix spokesman pointed out its €441,775 tax bill is effectively a rate of 22%. “In the UK, Netflix is financially contributing in different ways with corporate taxes, wages and tens of millions of pounds in VAT as well as funding dozens of UK productions for hundreds of millions of pounds,” he said.
“We have more than 30 UK projects in various stages of development. In addition to ‘The Crown’ launching on November 4, other shows and movies include: ‘Black Mirror,’ ‘Lovesick’ (formerly known as ‘Scrotal Recall’), or Brad Pitt’s ‘War Machine’ movie.”
US tech giants are under pressure to increase the amount of tax they pay in the UK. Facebook paid £4.1 million ($5 million) in UK corporation tax last year. This was a massive increase on £4,327 ($5,276) in 2014, but campaigners are still not happy.