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Netflix paid £3.2m in tax on £940m of UK subscription revenue Mark Sweney
Netflix paid £3.2m in UK corporation tax in 2019, despite making an estimated £940m from British subscribers who have joined the binge-watching streaming revolution.
Netflix UK, which enjoyed its best year in 2020 as pandemic lockdown conditions drove global subscribers past 200m, reported revenues of £120m and pre-tax profits of £13m in 2019 across the three businesses the US company has registered at Companies House.
The hundreds of millions of pounds Netflix makes from the monthly fees of the 11 million British subscribers the service attracted by the end of 2019 are funnelled through separate accounts at its European headquarters in the Netherlands.
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“As Netflix continues to grow in the UK and in other international markets, we want our corporate structure to reflect this footprint,” a Netflix spokesperson said in a statement. “So from next year, revenue generated in the UK will be recognised in the UK, and we will pay corporate income tax accordingly.”
The think tank TaxWatch reports that the company has moved profits from the UK and other countries to its European headquarters in the Netherlands, known as Netflix International. Its declared revenue in the UK to date (previously derived from its holding company Netflix Services UK) has been out of kilter with its subscriber numbers, estimated to hit 14 million in 2021, which in turn would amount to £1.3 billion in revenue, according to analytics firm Ampere Analysis.