Labour calls on George Osborne to 'get a grip' in Netflix tax row


Chancellor George Osborne has been called upon to "get a grip" on the issue of Netflix's UK tax contribution. 

The movie streaming service last year paid no corporation tax in the UK, according to The Sunday Times, despite making revenue of more than £200 million in Britain. 

Labour's shadow Treasury minister Richard Burgon criticised the Chancellor closing 153 HMRC tax offices, suggesting it helped companies to "undermine" British business. 

The report said the subscription fee paid by UK customers goes to Netflix International BV, based in Luxembourg until the end of 2014.

It is claimed that despite Britain being Netflix's biggest market in Europe, the company is paying income tax in Luxembourg and not the UK - a move which is not against the law.

Mr Burgon said: "George Osborne needs to get a grip of this issue in the new year as after being Chancellor for five years he has no-one else left to blame but himself.

"Many families will be paying to sit down together this Christmas to watch programmes on Netflix and won't expect that the money they give may be undermining British businesses.

"It's the businesses and taxpayers who pay their taxes who have to carry the burden for those who do not.

"This only further makes George Osborne's decision to close 153 tax offices at HMRC look like another mistake from a Chancellor who, only last month, was shown over the police and tax credit u-turns to cut first and think later."

Netflix currently has several million customers in the UK and is the home of series such as House of Cards and Orange is the New Black. 

A minimum of £5.99 is charged for a monthly subscription but this can range up to £8.99 per month for its "premium" service. 

Analysis by the paper revealed the British subsidiary of the accounts, Netflix Services UK, received an "income tax credit" of about £35,000.

The company, originally started in the US, reportedly said it is expecting to pay some corporation tax in the UK this year. 

HMRC said that important work had been done to ensure companies pay their "fair share" of tax. 

A spokesman said: "HMRC is clear that multinational companies must pay the tax that is due and we do not settle for less.

"The Government has led the way in taking action to ensure multinational companies pay their fair share of taxes, including introducing the diverted profits tax to make it harder for multinationals to divert profits out of the UK.?

"We have also played a critical role in the OECD's project to reform the international corporate tax system to prevent tax avoidance."