Joel Muckett 9 Oct 2017 05:00pm

Airbnb paid less than £200,000 in UK corporation tax

Airbnb has paid less than £200,000 in corporation tax last year, despite generating over £600m in rental payments for property owners

Although commissions are booked through an Irish subsidiary, the company has two UK-based subsidiaries, one of which did not pay corporation taxes because deductions resulted in a loss, according to a report from the BBC.

Airbnb UK, which promotes the website and app to British consumers, did not pay corporation tax despite earning £463,000 in pre-tax profits because they gave shares to staff which were tax deductible.

Meanwhile, Airbnb Payments UK, which deals with payments between travellers and landlords in countries outside of the United States, China and India, reported pre-tax profits of £960,000 and paid £188,000 in corporation tax.

The amount was £8,000 less than it paid in 2015.

“We follow the rules and pay the tax we owe in places we do business,” a statement from Airbnb read.

“Our UK office provides marketing services and pays all applicable taxes, including VAT.”

The company argued that their company “boosted” the UK economy by £3.4bn and was “fundamentally different” to other companies, which they claimed “take large sums of money out of places they do business”.

Airbnb added that they not only paid taxes in places they did business, but took “a number of steps” to make it easier for hosts to pay tax.

Founded in 2008, the $24bn company offers an alternative to hotels by allowing travellers to rent rooms and properties from landlords.

In recent years, there has been concern over the tax arrangements of technology companies.

Last week, Amazon was ordered by the European Commission to pay €250m in back taxes to Luxembourg, following a three-year investigation into whether a tax deal between the two amounted to state aid.