Facebook to hire 500 new staff in UK

Facebook has joined the list of technology giants committing to the UK with the pledge of a sizeable investment and more jobs.

The social networking giant is redeveloping its new headquarters in London's Fitzrovia to accommodate 1,500 staff, 500 more than the original number planned, European head Nicola Mendelsohn told the Confederation of British Industry (CBI) this morning.

"Many of those new roles will be high-skilled engineering jobs as the UK is home to our largest engineering base outside of the US," she said.

The UK is already the base for important Facebook innovations, including "Aquila, a solar-powered, unmanned plane that provides internet connectivity to remote regions", says the BBC.

It adds: "Engineers at Facebook's London office are continuing the development of Workplace, a platform devised to improve communications… within a business, launched last month."

The CBI conference also heard from Prime Minister Theresa May, who announced the government will invest some £2bn in new tax breaks to boost science and research in the UK.

Despite the Brexit vote and the economic uncertainty it has brought, several technology companies have announced big investment plans for London in recent weeks.

Google announced it will invest £1bn in a new headquarters that will up the number of staff it employs in the capital from 4,000 to 7,000, says the BBC, and Apple is to make a major investment in the Battersea Power Station redevelopment to create its new base.

Facebook shares plummet despite bumper profit

3 November

Facebook has announced a huge leap its profits, posting a 59 per cent year-on-year rise in advertising revenue for the third quarter of 2016.

Net income for the social networking site rose 166 per cent from $896m (£726m) in the three months to September 2015 to $2.38bn (£1.93bn) for the same period this year.

Despite those stellar figures, Facebook's shares tumbled as much as seven per cent in after-hours trading in New York. By lunchtime today, those losses had been pared slightly, but it was still set to open five per cent lower.

The negative reaction followed comments from chief financial officer Dave Wehner, who cautioned soaring revenue is likely to slow down "meaningfully" in the next few months.

In particular, he said there was a "limit on the number of ads [Facebook] could put on people's timelines", the BBC reports.

Nevertheless, there were plenty of positives in the quarterly trading update, not least a 16 per cent rise in active monthly users to 1.8 billion, along with "enviable operating margins of 45 per cent", Fortune says. 

More than 1.1 billion people log into Facebook on their smartphones each day.

Chief executive Mark Zuckerberg says the company is particularly pleased with how the platform has been used during the US presidential election campaign.

"Facebook is the new town hall and we are proud of the role that we've played in increasing civic engagement," he said.

But it hasn't all been plain sailing, says The Guardian. 

Facebook has had to fend off allegations of anti-conservative political bias by editors handling the site's Trending module, plus deal with a replacement algorithm that "promoted fake stories".

In September, the Wall Street Journal revealed the site had "vastly overestimated average viewing time for video ads on its platform for two years", causing outrage among ad buyers and marketers.

Facebook pays £4m in UK tax – but fails to silence critics

10 October

Facebook paid almost 1,000 times more tax in the UK last year than in 2014, but it has failed to quell criticism of its tax affairs the country.

The social network's accounts for the year to the end of December 2015 shows its UK arm generated revenues of £210.7m, more than double the £104m of 2014, says the Daily Telegraph.

On that, it paid £4.17m in corporation tax, a figure well in excess of the £4,327 it paid the previous year, when the firm was the subject of widespread opprobrium.

But this figure still equates to a tax rate of less than two per cent as Facebook's UK business actually generated a loss of £52.5m before tax for the year, a much bigger deficit than the £28.5bn logged in 2014.

As in the previous year, the company would have been profitable were it not for the £71m it paid into a share-based staff bonus scheme, some £104,105 for each employee. Last year, Facebook paid bonuses totaling £35m.

Worse still for angry campaigners arguing the tech giant paid too little tax, changes to HMRC rules allowing payment to be offset against Facebook's tax bill resulted in a credit of £11m, which can be used to reduce tax in future years.

Many are angry Facebook reduces the amount of tax it has to pay in cash by handing out share bonuses to its staff.

Experts say that, as in previous years, no sales were booked in the UK and all revenues are for marketing-based activities, making it hard to assess how much Facebook should be paying.

"The Facebook UK accounts just record the costs it incurs in the UK, with a bit of profit added on to keep HMRC happy," said Richard Murphy, a chartered accountant and at City University, told the BBC.

From this year, Facebook has vowed to book sales from its biggest UK customers in their home country, rather than in Ireland. This pledge doesn't cover online sales – and obviously that tax credit will reduce the impact on its bottom line at least initially.