It’s emerged Her Majesty’s Revenue and Customs (HMRC) is looking into the revenues recorded by Netflix, though despite concerns over the tax arrangements of some digital services, the investigation is said to be no more than standard practice.
The streaming company is estimated to make some £850 million from its British subscriber base, but only declares a UK profit of £1.12 million.
Its British arm declared revenues of £23.9 million.
The Times reports Netflix Services UK Limited employed just 14 people in its London offices. The purpose of the office was to provide “marketing and support services” to Netflix’s main European subsidiary, the Amsterdam-based Netflix International BV.
The Netherlands has become a hub for technology companies because of its light-touch regulatory environment.
A spokesperson for Netflix told Broadband TV News: “Netflix is contributing to the UK economy in many different ways. The provision of our service to UK-based subscribers results in significant amounts of VAT for the UK government: 20% of the price of every Netflix UK subscription.
“We are also investing 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 directly on Netflix original productions in the UK, with this number set to grow as Netflix continues to invest in creating and licensing UK content. HMRC regularly audits the accounts of UK companies and we’re currently engaged with them on this standard review”
