Facebook to pay millions of pounds more in UK tax

Facebook is set to pay millions of pounds more in tax in the UK after a major overhaul of its tax structure.

After heavy criticism that it was avoiding tax, the BBC can reveal that profits from the majority of Facebook's advertising revenue initiated in Britain will now be taxed in the UK.

It will no longer route sales through Ireland for its largest advertisers.

That includes major businesses such as Tesco, Sainsbury's, consumer goods firm Unilever and advertising giant WPP.

Smaller business sales where advertising is booked online - with little or no Facebook staff intervention - will still be routed through Ireland, which will remain the company's international headquarters.

I am told the change will mean that Facebook will account for substantially more revenue in the UK and will therefore pay a higher level of corporation tax on the profits it makes here.

Corporation tax is levied at 20% on the profits a business makes.

The changes will be put in place in April and Facebook's first, higher, tax bill, will be paid in 2017.

My sources tell me that Facebook moved after coming under increasing global pressure on its tax affairs and as a reaction to changing tax rules.

There was widespread controversy when it was revealed that Facebook paid £4,327 in corporation tax in the UK in 2014, despite Britain being one of the company's biggest markets outside the US.

Globally, the company makes more than £1bn of profit every three months. It does not reveal figures for how much business it does in the UK.

The government's new diverted profits tax was also likely to have a punitive effect on the business in Britain.

That tax is set at 25%, higher than the corporation tax rate, and is aimed at companies which use "contrived" structures to move profits out of the country.

Facebook executives will be told about the changes this morning.

"On Monday, we will start notifying large UK customers that from the start of April, they will receive invoices from Facebook UK and not Facebook Ireland," the internal post, seen by the BBC, says.

"What this means in practice is that UK sales made directly by our UK team will be booked in the UK, not Ireland. Facebook UK will then record the revenue from these sales. 

"In light of changes to tax law in the UK, we felt this change would provide transparency to Facebook's operations in the UK.

"The new structure is easier to understand and clearly recognises the value our UK organisation adds to our sales through our highly skilled and growing UK sales team."

At this stage, it is not possible to say precisely how much tax Facebook will pay.

It is not under any regulatory obligation to reveal the size of its UK business until it reaches 10% of its global operations, which generate revenues of nearly $18bn (£12.7bn) a year. 

But the importance of Britain to Facebook is revealed by the fact it employs 850 people in the UK and is building a new headquarters in London.

Facebook has now said that those staff are doing "value-added" work, a key issue in the setting of tax rates.

Before this new structure, Facebook's UK revenues were based on a fee payment from Facebook Ireland, which meant that its actual sales here did not affect its tax bill.

That is a similar structure to Google UK, which is paid by its US parent firm for operations in Britain.

Google has also faced controversy over its tax affairs.

In January, the BBC revealed that the search giant would pay £130m in back taxes after an inquiry by the tax authority, Her Majesty's Revenue and Customs. 

My Facebook sources insist that this move is not a reaction to the Google settlement and has been planned "for some time".

There has been speculation that Facebook is also the subject of an inquiry by HMRC over its tax structure, but the social media giant has refused to confirm or deny there is any live process.

I am told the company's new structure has been discussed with HMRC, although there is no formal "agreement" with the tax authority.

Prison Officer Injured In Belfast Car Bombing

Security sources have identified the man as a prison officer.

Sky News Ireland Correspondent David Blevins said the man has been taken to hospital with what are believed to be serious leg injuries but he is not thought to be in a life-threatening condition.

It is understood he had been driving a van when the device detonated and detectives are examining the possibility that the bomb may have dislodged from the vehicle as it went over a speed bump.

The incident happened in the Woodstock Road area of the city and that road is now closed at its junctions with Omeath Street and Ravenhill Avenue.

Police Service of Northern Ireland Superintendent Darrin Jones said: "We believe a device has exploded under a vehicle.

"The incident was reported to police at 7.10am this morning Friday, 4 March."

Emergency services are still at the scene and witnesses report that part of a twisted bumper can still be seen lying at the side of the road.

A shop worker nearby said he had heard a "massive" bang, adding: "I didn't know what it was but it was huge."

Blevins said: "This bears all the hallmarks of a dissident Republican attack.

"Renegade Republicans who oppose the peace process, who believe Sinn Fein surrendered, if you like, have continued to be active, although security forces and police have been very successful in thwarting attacks of this nature."

Stormont First Minister Arlene Foster condemned the incident as a "disgraceful and despicable attack in east Belfast".

Sinn Fein MLA Gerry Kelly said: "There can be no place for such attacks in our society.

"I hope that the man injured in this incident makes a full and speedy recovery.

"Those behind attacks like this represent no one and have nothing to offer the community."

'Maritime Hoonery': Warship Slammed For Speeding

A speeding Australian warship has been blamed for damaging boats and a fish farm in a tranquil part of Marlborough Sounds in New Zealand.

Residents from one of the communities of the collection of picturesque islands complained the warship HMAS Warramunga made sharp turns at speed during a training exercise.

Paul Keating, a Guardian of the Sounds member whose boat was slammed into a wharf, told the Australian Broadcasting Corp (ABC): "Twelve people rang the harbour master that day to lay complaints and one of them was, I believe, from the salmon farm.

"Maritime hoonery would be a good way to describe [it].

"We haven't been given any reason why they chose to drive into the bays and then do very sharp turns."

The Royal Australian Navy said in a statement reported by ABC: "Warramunga was aware of, and sensitive to, local aqua culture farms in the area, and following public concern adjusted its training."

The community has demanded an apology for the vessel's conduct last week.

Kim Puts Military On 'Pre-Emptive Attack' Mode

North Korean leader Kim Jong-Un has ordered his country to be ready to use its nuclear weapons at any time.

According to the official KCNA news agency, he also told the country's military to be on "pre-emptive attack" mode in the face of growing threats from its enemies.

It comes after the UN adopted its toughest sanctions to date in response to Pyongyang's fourth nuclear test and rocket launch.

Mr Kim said North Korea should "bolster up (its) nuclear force both in quality and quantity" and stressed "the need to get the nuclear warheads deployed for national defence always on standby so as to be fired any moment".

He added: "Now is the time for us to convert our mode of military counteraction toward the enemies into a pre-emptive attack one in every aspect."

North Korea has previously threatened pre-emptive attacks on its enemies including South Korea, Japan and the US.

The Pentagon has downplayed the risk from North Korea's nuclear arsenal.

"The US government assessment has not changed," a spokesman said.

"We have not seen North Korea test or demonstrate the ability to miniaturise a nuclear weapon and put it on an ICBM (intercontinental ballistic missile.)"

Donald Trump Defends Torture at Republican Debate

Donald Trump defended waterboarding, torture and killing terrorists’ families at the Fox Republican debate Thursday, all positions for which he’s drawn criticism during the course of his campaign.

When asked about former CIA Director Michael Hayden’s recent comments that the military could defy unlawful orders to torture or kill civilians, Trump said, “They won’t refuse. They’re not going to refuse, believe me.”

“You look at the Middle East, they’re chopping off heads, they’re chopping off the heads of Christians and anybody else that happens to be in the way, they’re drowning people in steel cages, and now we’re talking about waterboarding… It’s fine, and if we want to go stronger, I’d go stronger too. Because frankly, that’s the way I feel. Can you imagine these people, these animals, over in the Middle East that chop off heads, sitting around talking and seeing that we’re having a hard problem with waterboarding? We should go for waterboarding and we should go tougher than waterboarding.”

When Trump then went on to defend his assertion that the United States should target the families of terrorists, he repeated a debunked conspiracy theory about the September 11, 2001 attacks.

“When a family flies into the World Trade Center, a man flies into the World Trade Center and his family gets sent back to where they were going… They knew what was happening. The wife knew exactly what was happening… I have no problem with it.”

According to the Washington Post, “There is no evidence that the hijackers had wives in the United States, shipped them home or even told them of the plot in advance. In fact, virtually all of the hijackers were unmarried. So there is no way the alleged wives could have known what was going to happen.”

Clooney Says Hollywood Has Failed On Diversity

George Clooney believes Hollywood has failed when it comes to who is making films and being put in front of the camera in recent years.

He is currently starring in the new Coen brothers film Hail Caesar, about the film industry during the 1950s.

While the decade is viewed as the twilight of a golden age of cinema, Clooney believes people often wrongly romanticise the past.

He said: "Yes it was easier if you were white and male, but probably not easier if you were black or a woman or had polio so there are an awful lot of things that have got much better....(in terms of diversity) we have periods of time when we're really good at it.

"The United States particularly has had great moments of civil rights movements and great moments in cinema as well.

"And we've had the last couple of years when we've really truly failed, not just about nominations but who is making films and who we're putting in front of the camera."

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Hail Caesar's stars include Josh Brolin, Channing Tatum, Ralph Fiennes and Tilda Swinton and is based on the true story of a film industry fixer whose purpose was to protect the image of the studios and its stars.

It was a time when everything was controlled by the studio system. Real life, however, was more shocking than fiction, according to Swinton.

"They did not leave any stone unturned in terms of covering up the mess of human life.

"They were doing really nasty things, covering up drive-by shootings and getting women to have abortions, really scary stuff.

"The Coens have cleaned it up a little bit in this film.

"It was a tough time but it was completely controlled, like the fixer says to my character 'The audience doesn't want to know about all the human mess, they want to believe this guy is a good guy'."

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Tatum believes that although audiences want to see more of the "mess of human life" now, things are better for stars than before. 

"I think we as actors probably have a lot more freedom to do things that we want to do but there are probably some beautiful things of anonymity and you didn't have to worry about the internet and everybody taking pictures of you."

Hail Caesar opens in the UK on 4 March.

Hubble Discovers Ancient Galaxy Far, Far Away

NASA's Hubble Space Telescope has discovered the most remote galaxy ever seen from Earth - 13.4 billion light years away.

Known as GN-z11, the constellation of stars is among the first that formed in the universe, 400 million years after the Big Bang.

A research team from Yale University, the Space Telescope Science Institute and the University of California used Hubble's Wide Field Camera 3 to measure the distance to GN-z11.

Astronomer Pascal Oesch said: "We’ve taken a major step back in time, beyond what we’d ever expected to be able to do with Hubble. We see GN-z11 at a time when the universe was only three percent of its current age."

Researchers say the fuzzy images reveal new clues about the early universe, but quite how GN-z11 was created will remain a mystery for now.

"It's amazing that a galaxy so massive existed only 200 million to 300 million years after the very first stars started to form," said astronomer Gary Illingworth.

"It takes really fast growth, producing stars at a huge rate, to have formed a galaxy that is a billion solar masses so soon."

His colleague Ivo Labbe, said: "The discovery of GN-z11 shows us that our knowledge about the early Universe is still very restricted. Probably we are seeing the first generations of stars forming around black holes?"