eBay’s UK tax bill in 2016: £1.6m

By Dan Wilson October 13, 2017 - 7:09 am

Numerous reports have been putting eBay’s UK tax bill under the spotlight after its UK accounts were filed with Companies House last week.

eBay (UK) Ltd made a corporation tax payment of £1.6m on a total profit of £7.7m. Total revenues last year came to £200m.

But eBay Inc. has reported that total revenues in 2016 from eBay’s operations in the UK were $1.3bn which includes income from Gumtree and Stubhub. So what’s going on?

The clue is in the accounts filed by eBay where they describe the activities of the UK operation. It provides “services to eBay International by recommending market penetration and advertising strategies for the UK internal marketplace and related third party advertising sales in the UK, Germany, Italy, Belgium and Australia.”

Swiss based eBay International owns eBay UK. eBay Inc. in the US owns eBay International. The Richmond based operation isn’t the entity that offers and operates the marketplaces. In tax terms they purely operate, as they suggest, as an advertising and marketing wing and also strategic advisers for the bigger eBay whole.

eBay has given its usual tax related comment regarding the situation: “In all countries and at all times, eBay is fully compliant with national, EU and international tax rules including those of the OECD, including the remittance of VAT to the appropriate authorities.”

And in an interview this week, the relatively new eBay UK head Rob Hattrell gave further details of eBay’s tax position in Britain. Hattrell said: “We pay all our tax in all jurisdictions. You have to look at broader contributions we make – at the people we employ and the businesses we employ.”

There’s nothing new or surprising about this particular arrangement of tax affairs. And neither is it one uniquely utilised by eBay. Starbucks and others employ a similar mechanism and it is entirely legal.

Even when you consider this, what do you think of eBay UK’s Tax bill?

  • 3 years ago

    I don’t suppose any of the mainstream media picked up that as of August eBay started billing all UK sellers from the UK and charging UK VAT and corresponding that their next set of accounts might look very different?

    Plus it’s the same old story in my view… It’s up to governments to change the law if they don’t like the tax regimes that they themselves set up… 😉

    • james
      3 years ago

      “You have to look at broader contributions we make – at the people we employ and the businesses we employ”
      – Yes, like when ebay look at a seller’s broader contributions, like the people and businesses they employ, before banning them for no reason at all.

      You must be considerate to ebay, but ebay must not be considerate to anyone but ebay, thus is the ebay logic.

  • SAM
    3 years ago

    I would say we are all used to this now. Amazon eBay Starbucks does it matter they are all the same type of company.
    In a time when everyone is supposed to be struggling the very few at the top and it will be those at the top of eBay will be coining it in, not staff in the offshore call-centres, guarantee they will be on a pittance.
    Profits first and never mind the countries or society’s you make those profits in, in which wages are kept subdued and 0 hour contracts are the standard.
    All I know for every pound we make in this country we put a lot more back into it than these companies. The CEO’s statement is standard waffle to try and justify what they do.
    Anyway these companies will only ever look for loopholes to profit themselves, it is up to the Politicians to deal with it they make the laws not the corporate s. Pay what you make in profit in this country this is all. Anyway are we not supposed to be taking back control so what is stopping the Government now anyway???. Probably get worse under the lot we have right now.

    Plus it ain’t eBay who is paying the VAT on fees that is us, and many small businesses that are not even VAT registered.

  • Steven Elkins
    3 years ago

    I don’t consider it a ‘loophole’ when a company has the expertise to understand an increasingly complex tax regime, and apply that expertise across different countries which they trade in. Forensic examination of ebay accounts would probably stand greater scrutiny than, say, the accounts of the EU administration or indeed, that of the average MP. The real problem is that HMRC doesn’t understand these laws, which constantly change on the whim of Goverment.

  • 3 years ago

    I’ve concluded I don’t care anymore. From where I sit I think for the size of the country and the way its citizens are being increasingly subject to what amounts to an elected dictatorship by elitist well educated buffoons, that we are one of the most heavily taxed populations on the planet and that the UK treasury is actually sitting on Trillions of pounds not just billions. Good on e bay for reducing its tax account liability. Don’t forget, there isn’t just income tax and apart from corporation tax I am infuriated the way my income is taxed at source. Then whats left over as supposedly mine is then taxed again if I save any, taxed again when want buy insurance, is taxed again if I want my children to inherit any, taxed again and again and again. Our system Government has a hidden army of Civil Servants who are the real people running this charade who we have no control over. The UK is probably far richer than anyone could possibly imagine. So where is all this tax actually going? This is why there is so much controversy about why our Government does not rigorously chase up the so called Tax evaders. It doesn’t really need to. Some groups of unseen people behind the the public face of the Government are siphoning off the revenues. A lot of MP ‘s and ministers and Civil Servants are on other company boards, have businesses of their own and definitely do still undertake sharp practice and fraudulent and corrupt actions. It’s inevitable in the so called upper educated classes. They are untouchable while the rest of the general hard working population are subject to the countrys’ laws on the statute books with a hard uncompromising stance from those at the top. As far as I am concerened any one who can get away with paying over the odds in tax I take my hat off to them. Yep, I have managed together myself into a position where I have not had to pay any income tax for the last two years. The difference is its all LEGAL!

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