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Barking MP condemns Netflix for corporate tax avoidance

Dame Margaret Hodge says streaming services should be included in a digital services tax 

The MP for Barking has accused Netflix of corporate tax avoidance, despite the streaming giant making millions from customers in the United Kingdom. 

Netflix is the largest streaming service in the world and home to popular shows such as The Crown as well as films like The Irishman. 

However, it reportedly did not pay any corporate tax in 2017 or 2018 in the UK.

Speaking in the House of Commons last night, Dame Margaret Hodge explained Netflix’s 11 million UK customers are billed by a subsidiary company in the Netherlands, making it appear as though no profit is made. 

According to Tax Watch, Netflix actually made around £70 million in the UK in 2018 and should have paid roughly £13 million in corporation tax in that year alone. 

Hodge also alleges Netflix has used the subsidiary company in the Netherlands, which is used to charge UK customers, to move between £251 and £329 million of non-US profit into tax havens.  

“Large profitable companies like Netflix claim no profit is made here and as a result are simply making money on the back of the UK tax payer,” said Hodge. “It’s the worst kind of corporate welfare. 

“Not only do they deliberately dodge their corporation tax bills but they in fact receive money from the public coffers from high end television tax relief.”  

She says the company benefited from nearly £1 million in tax credits from the country.

The Barking MP also highlighted that Netflix utilises the UK’s physical and digital infrastructure and recently bought a lease for the Shepperton Studio site which could last up to 10 years. 

She is calling for video streaming services to be included in the new digital services tax which she described as “oven ready.” It is set to come into effect in April 2020.

It would not be a unique move, as Brazil already has a two per cent tax which covers online streaming services and is paid to local government. France has a two per cent levy as well. 

Netflix has been approached for comment.

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