Netflix accused of ‘superhighway theft’ in Parliament

Netflix has been accused of committing “superhighway theft” by not paying any company tax within the UK.

Main a debate within the Commons, Labour MP Dame Margaret Hodge stated the taxpayer was “being taken for a journey” by the video streaming service.

Quoting analysis from the suppose tank Tax Watch, she stated the agency ought to have paid over £13m in UK tax in 2019 however “intentionally prevented” doing so.

Netflix has been contacted for a response.

Dame Margaret, who has waged a long-running marketing campaign towards massive tech corporations over alleged tax avoidance, referred to as for the federal government to increase its new digital companies tax to cowl video streaming companies when it comes into power on 1 April 2020.

The present plan will see the likes of Fb, Google and Amazon pay 2% of revenues to the Treasury to right the “misalignment between the place the place earnings are taxed and the place the place worth is created”.

The ex-Labour minister stated together with Netflix would make sure the agency, whose whose hit reveals embrace The Crown, “begins to pay its fair proportion”.

In keeping with estimates by Tax Watch, Netflix had 11.62 million subscribers within the UK in 2019.

‘Tax havens’

The suppose tank stated this may have generated a £1.1bn in revenue for the corporate, with an estimated revenue of £69m – which means it ought to have paid £13m in tax.

Nonetheless, in its newest submitting with Corporations’ Home, the UK arm of Netflix stated it solely made earnings of £2.35m within the nation.

Dame Margaret, who chairs the all-party parliamentary group on accountable taxation, additionally stated Netflix obtained £924,000 from the UK authorities by way of the high-end tv tax aid, given to firms that produce tv reveals within the UK.

She advised MPs: “Netflix takes out of the general public purse greater than it contributes in company tax. Whereas Her Majesty’s Income and Customs fails to gather cash from it in company tax, the US authorities is extracting tax from the identical earnings that it earns right here after which hides in unknown tax havens.”

She added: “What is especially galling is that Netflix really makes a web revenue from the UK taxpayer. Within the final two years it has obtained practically £1m from the federal government in tax credit, and that’s simply the beginning.

“It’s nothing lower than superhighway ​theft. The UK taxpayer is being taken for a journey. We are literally handing over money whereas Netflix stashes cash offshore.”

‘Create worth’

Dame Margaret stated that Netflix was “removed from the one perpetrator” and “tax credit score abuse is rife in different industries, together with movie and video video games”.

Monetary Secretary to the Treasury, Jesse Norman, responding for the federal government, advised MPs he couldn’t touch upon particular person firms.

However, he added, below worldwide tax guidelines the UK was already entitled to tax the share of an organization’s earnings that relate to manufacturing actions.

He stated the federal government’s digital companies tax was designed to focus on firms that “depend on their customers to create worth the place that worth just isn’t recognised below present worldwide tax guidelines”.

However the brand new tax was meant to be a “short-term measure pending ​settlement of a long-term international answer, probably together with the US, that may deal with the broader challenges posed by digitisation”.

He additionally reminded MPs that Netflix was “planning to speculate about £232m in Shepperton Studios”, close to London, which, he stated, was “not a trivial act”.