Netflix paid no corporation tax in the UK in 2014

Netflix paid no corporation tax in the UK last year despite having brought in an estimated £200 million in revenue here, according to a newspaper investigation.

The allegation against the streaming service, which has 5 million UK subscribers, puts it on the list of the multinationals under scrutiny over their tax structures.

It emerged after the Sunday Times published an analysis of company accounts for the maker of House of Cards and Orange is the New Black and other documents.

The newspaper said its investigation showed that any profits generated by its UK customers in 2014 were booked overseas at a Dutch company called Netflix International BV.

Accounts for that company, which was based in Luxembourg until the end of 2014, show a net turnover of £415 million and profits of £11.3 million for the year to the end of December 2014, the newspaper added, noting that UK customers, who pay at least £5.99 a month for the service, were the largest contributors to turnover.

It did pay tax in Luxembourg, but only £573,396, a rate of around 5%, according to the Sunday Times.

The European Union has implemented legislation aimed at tackling tax loopholes for multinationals and Netflix is now paying VAT in the UK, the bill for which is forecast to be £70 million this year, the publication said.

The latest accounts for Netflix's UK arm, Netflix Services UK, filed at Companies House show it made a loss of €213,163 (£155,234) between June 18 and December 31 2014.

It received an income tax credit of €47,986 for the period.

The Standard could not immediately reach Netflix for comment outside ordinary US business hours.

A spokesman told the Guardian its British subsidiary employs about 12 people and will pay some corporation tax this year.

“We are fully compliant with all applicable rules,” he added.

Overall, Netflix made $5.5 billion in revenue last year, while its profit hit $267 million.