Frances Ball 4 Oct 2019 11:33am

Questions over tax rebate for Netflix

HMRC is reviewing the tax rebate it gave to Netflix, which has eight million subscribers in the UK

Netflix Services UK brought in €48m (£42.7m) in revenue last year and reached a pre-tax profit of €2.3m (£2.04m).

Subscriptions, at either £5.99 or £11.99, are booked through its main European subsidiary based in Amsterdam: the company says that the British outpost was created for marketing and support services. It employs 29 people in the UK. 

Nonetheless, the company qualified for £51,204 in corporation tax credit after it claimed production credits for series made in the UK, including The Crown and Sex Education.

The government offers incentives for domestically produced shows. However, the scale of the tax rebate has come into question.

Although the government has made moves toward forcing international digital companies with a large UK revenue to pay more tax, under its current plans streaming services like Netflix or Spotify are less likely to be included.

The heaviest hit will instead be social media platforms, search engines, and marketplace forums where goods are sold online.

Britain is Netflix’s third largest market, after North America and Brazil.