Netflix paid just £5million in UK tax last year after earning £1.3billion in Britain
- The US streaming giant used a legal accounting loophole to avoid £49 million
- By diverting cash to the Netherlands, Netflix could avoid higher UK taxes
- 2021 accounts reveal £260 million was profit made by the streaming platform
Netflix paid a mere £5 million in UK corporation tax last year, despite earning more than £1.3 billion in Britain.
The US streaming giant used a legal accounting loophole to avoid an estimated £49 million in UK taxes by diverting cash to the Netherlands.
Netflix’s UK arm took a record-breaking £1.38 billion from British subscribers last year – but funnelled most of this abroad before it could be taxed.
Its 2021 accounts reveal that it transferred £1.24 billion – of which an estimated £260 million was pure profit – to Dutch-registered Netflix International BV ‘per a distribution agreement’.
Netflix used a legal accounting loophole to avoid an estimated £49 million in UK taxes by diverting cash to the Netherlands
The legal move effectively reduced the company’s UK corporation tax rate on its profits from the standard 19 per cent to under 2 per cent – reducing its bill from around £54 million, to just £5.2million.
Tory MP Nigel Mills, of the fair tax all-party parliamentary group, said it looked as if Netflix was ‘not paying a fair amount of tax in the UK’, but the company insisted it invested ‘more in production’ here than ‘anywhere outside of North America’.
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