Accommodation sharing website Airbnb is the latest hi tech giant to find its UK tax arrangements under scrutiny, after it emerged the company paid just £188,000 in corporation tax last year despite collecting £657m of rental payments for property owners
The commissions the company earns in the UK are booked by its Irish subsidiary, but it also has two UK subsidiaries.
One is Airbnb Payments UK, which handles payments between landlords and travellers for countries other than the US, China and India and had a turnover in 2016 of £194.4m (2015: £53.5m) with cost of sales reported at £196.3m. This unit made a pre-tax profit of £960,000 and paid £188,000 in UK corporation tax in 2016, which was less than the £196,000 the company paid the previous year.
The second company, Airbnb UK is responsible for the website and app in the UK as well as marketing and promotion, had a turnover of £72.7m in 2016 down from £90.9m in 2015. It reported a £463,000 pre-tax profit last year but because it gave shares to staff, which are tax-deductable, there was no corporation tax bill.
In a statement, Airbnb said: ‘We follow the rules and pay all the tax we owe.
‘Our UK office provides marketing services and pays all applicable taxes, including VAT. The Airbnb model is unique and boosted the UK economy by £3.46bn last year alone.’
Report by Pat Sweet
