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Netflix

Netflix paid no UK corporation tax last year, report claims

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By The Drum Team, Editorial

December 20, 2015 | 2 min read

Netflix paid no UK corporation tax last year, according to reports, despite building up a five million strong subscriber base in the country.

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The film and TV streaming service generated an estimated £200m worth of UK revenues as it enticed subscribers with hit shows such as Breaking Bad and House of Cards.

But after analysis of its company accounts in today's Sunday Times, it will now gain attention as being the latest multinational to lawfully avoid corporation tax because British customers are contracted with Dutch company Netflix International BV, meaning profits from the UK in 2014 were booked overseas.

Figures obtained by the broadsheet show that Netflix International BV had a net turnover of £415m and profits of £11.3m. Netflix has global revenues of $5.5bn and total profits last year of $267m.

British subsidiary Netflix Services UK was given an income tax credit of £35,000.

The Sunday Times reports that the company has said it is in “expansion” mode and is making overall losses on its international operation. It also said it does expect to pay some UK corporation tax this year.

It joins the likes of Amazon, Starbucks and Facebook who have all come under scrutiny in recent years for the amount of tax they pay in the UK.

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