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Airbnb reveals its UK tax bill amid Tory calls for a digital services tax

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Airbnb paid just shy of £600,000 in UK tax last year, Morning Wire can reveal, as chancellor Philip Hammond raises calls for a unilateral digital services tax on tech firms.

In financial accounts seen by Morning Wire and due to be published on Companies House later this week, Airbnb paid just £596,992 in corporate tax in the year ending December 2017 across its two UK-based divisions.

This was based on annual operating profit before taxation of £1.8m, mostly as a result of staffing and marketing costs. Additionally, it represents a three-times increase from its 2016 tax payout of £188,000.

In a similar style to other large tech businesses in the UK, such as Facebook and Google, the majority of Airbnb's business profits in the region are channelled through its Ireland headquarters.

The news comes as Hammond ramped up plans for a so-called digital services tax at the Conservative party conference yesterday, where he claimed the UK would "go it alone" if needed with a special corporate revenues tax designed to hit big tech firms such as Airbnb.

Read more: Hammond says Tories are the 'party of business' as he attacks Corbyn

The proposition was met with public outcry from industry leaders, who said the measures will only hurt smaller British businesses and consumers.

"If the Chancellor continues to go it alone and pursue a digital services tax he will be cutting growing startups and scaleups off at the knees," said Dom Halls, executive director of the Coalition for Digital Economy.

"The tech giants Philip Hammond claims to be targeting are in fact best placed to deal with an increased tax burden, the true cost will be in hurting innovative British companies who want to develop at home then grow globally."

While CBI director-general Carolyn Fairbairn praised Hammond for bringing back "pride and confidence in British business", she also raised concerns over the digital services tax. 

She said: "All businesses are increasingly digital. Any new approach must be built on evidence from enterprise or it risks being blunt and counterproductive."

A spokesperson for Airbnb told Morning Wire:

"We follow the rules and pay all the tax we owe in the places we do business. Our UK office provides marketing services and pays all applicable taxes, including VAT."