UK tax bill for eBay shrinks as profits dip, but Swiss parent gets £95m dividend
A smaller tax bill was paid by eBay in the UK last year as profits and revenue declined, but it also handed nearly £100m to its Switzerland-based unit.
The British arm of the business paid £8m in tax for 2019, compared with £9.5m a year earlier.
At the same time, pre-tax profits dropped 23 per cent to £31.1m, according to accounts for eBay (UK) Limited filed at Companies House.
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Revenue also declined by almost £40m to £1.03bn, which the company said was due to the closure of its branches in Germany and Belgium, which had provided third-party advertising sales. Its average number of employees also decreased to 222 from 285.
eBay paid a smaller tax bill last year (Photo: Matt Cardy/Getty Images)
Payment to Swiss parent
But the UK business’s directors were still able to approve a dividend payment of £95m to its immediate parent, eBay Marketplaces GmbH, which is the Swiss-based company at the centre of eBay’s European operations. Last year, the UK unit did not pay any dividends, despite an increase in both revenue and profit.
A spokesman for eBay said: “eBay is fully compliant with all tax rules in all the markets in which we operate. Our latest tax return is for the operating period of January to December 2019.”
The accounts also reveal that the directors of eBay UK have determined that the company “has been largely insulated” from the effects of the Covid-19 pandemic to date.
Close eye on Brexit
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The business is also closely watching ongoing Brexit trade deal negotations, and directors said they would “strongly prefer” that a new agreement is reached between the UK and EU before the end of the transition period. However, it will make sure it is as “prepared as possible for any eventuality”.
The primary business of the UK unit is to collect payments from eBay sellers based in the UK, as well as fees from those wishing to advertise on the website.
The accounts for 2019 include a strategic report in which eBay UK’s directors detailed improvements they had made during the period for sellers, including new merchandising and analytics tools.
Earlier this month, eBay UK launched a “pay as you grow” scheme for startups using its selling platform, which offers discounted fees for first-time sellers.