eBay tax bill rises after HMRC review

Auction site eBay's UK subsidiary has agreed to pay an extra £7m in tax following a review by HMRC.

According to the latest accounts from the firm, its sales in 2017 rose to more than £500m, but its profits were still relatively small at £20m.

The £7m payment covers tax liabilities for previous financial years. Its tax bill for 2017 came to another £6m.

In 2016, eBay paid only £1.6m in corporation tax on declared profits of £7.7m.

An eBay spokesperson said it complied with all the relevant laws and rules of every country it worked in, including the UK.

A spokesperson for HMRC said it did not comment on identifiable taxpayers, but added: "HMRC has a very strong track record on challenging contrived tax arrangements. We make sure that large businesses, just like everyone else, pay all the taxes due under UK law and we don't settle for less."

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The settlement makes eBay the latest online giant to pay more tax in the UK after public concern that such companies have not been paying their fair share.

Big technology companies have frequently been criticised for booking profits in other countries and paying modest amounts of tax in the UK.

Earlier this week, it emerged that Facebook's UK tax bill tripled to £15.8m in 2017. However, the final amount was cut to £7.4m after the social media firm received tax relief for awarding shares to employees.

Meanwhile, PayPal's UK subsidiary saw its tax payments rise from €181,000 in 2016 to €4.7m in 2017 after another HMRC review.

However, retailer Amazon's UK tax bill for 2017 fell to £4.6m, down from £7.4m the previous year, in part because of a rise in share-based payments for staff.