Netflix was handed back £175,000 from the taxman despite taking home up to £438million from UK customers, it was revealed today.
The TV subscription giant, which is behind Stranger Things, Making a Murderer and Narcos, sends its subscribers’ monthly cash to its international parent company based in the Netherlands to legally avoid tax in Britain.
Netflix has claimed Foreign Tax Credit Relief where businesses can claim rebates from the Treasury if they can prove they have already paid tax on income abroad.
This was £175,000 last year and £35,000 in 2016 and the tax rebates have emerged in new company accounts seen by the Daily Mirror.
Netflix was handed back £175,000 from the taxman despite taking home up to £438million from UK customers, it was revealed today
Peter Dowd MP, Shadow Chief Secretary to the Treasury, said: ‘This is yet another example of big corporations exploiting our tax system at the expense of the taxpayer.
‘This Tory government seems perfectly happy to let the wealthiest few channel cash out of the country, and then come back for a handout’.
Frank Field, Labour MP and chairman of the Work and Pensions Select Committee, said: ‘Clearly we need a new tax system which centres on the sales and views generated by the company in this country.
‘Otherwise they will be free to carry on picking and choosing the countries in which they pay tax, if at all.’
Its main British business is called Netflix Services UK but it is owned by Dutch-based Netflix International BV and all its UK sales are funnelled through there.
Netflix Studios UK, its British programme-making arm, was set up three months ago but is yet to file any accounts.
Sending their £438million estimated UK income to Holland allows them to pay corporation tax at a lower rate than in the UK.
A spokesman said: ‘Netflix is contributing to the UK economy in many different ways, including generating hundreds of millions in VAT for the UK government through the provision of our service to UK-based subscribers.
‘We are investing also hundreds of millions directly in the UK entertainment industry, with close to 40 projects underway this year including new seasons of The Crown and Black Mirror and co-productions with British broadcasters.
‘More than 20,000 people are working on Netflix original productions in the UK, with this number set to grow as Netflix continues to invest in creating and licensing UK content’.
Apple, Google, eBay, Amazon and Facebook are among the big US companies to avoid UK corporation tax using international structures – often known as the ‘Dutch Sandwich’.
Netflix added 7.4 million new subscribers in the past quarter worldwide as the global television giant ramped up profits with its strongest-ever revenue growth since launching its streaming service.
In its quarterly update in April, Netflix reported profits grew 63 percent from a year ago to $290 million, while revenues jumped 43 percent to $3.7 billion.
![Netflix, which is based in California, pictured, reported profits grew 63 percent from a year ago to $290 million, while revenues jumped 43 percent to $3.7 billion](https://i.dailymail.co.uk/i/newpix/2018/06/21/11/4D7B133B00000578-5869351-image-a-9_1529577327367.jpg)
Netflix, which is based in California, pictured, reported profits grew 63 percent from a year ago to $290 million, while revenues jumped 43 percent to $3.7 billion
Netflix’s new member additions boosted its subscriber base to 125 million worldwide, including 118.9 million paid subscribers.
The California-based video giant, which has been on a tear with original programs including ‘The Crown’ and ‘Stranger Things,’ saw its shares surge 6.5 percent in after-hours trade on the stronger-than-expected results.
Netflix has raised its subscription fees as it expands globally to nearly 200 markets and invests heavily in original programming.
The company plans to invest up to $8 billion this year in new TV series, films, documentaries and other programs in several languages ‘to serve the diverse tastes of our growing global membership base,’ the company said in its letter to shareholders.
Recently released programs include the sci-fi thriller ‘Altered Carbon’ and ‘A Series of Unfortunate Events.’
Netflix this year won its first Academy Award this year for the documentary ‘Icarus’ on doping in sports.