Snapchat picks London as its 'second home' international base in a Brexit boost for Britain after Facebook, Apple and Google all plump for Irish headquarters to secure lower taxes 

  • LA-based company has a small team of 75 staff in Soho but is planning new move
  • And it will also pay tax on its worldwide profits in Britain unlike Google and Apple
  • Snapchat has 150m daily users worldwide and up to 10m here in Britain  

Snapchat is set to open its new worldwide headquarters in London in yet another post-Brexit business boost.

The LA-based company has a small team of 75 staff in Soho but is planning to move into new offices nearby and employ more workers.

Google, Apple, Facebook and Twitter have all chosen to have their headquarters in Ireland to take advantage of its generous tax breaks - even though their biggest international offices are in London. 

Snapchat, a mobile messaging service and fast-growing social media platform, is now valued at $25billion and is increasing in size by 30 per cent a year.

It has 150million daily users worldwide and up to 10million here in Britain. 

Good news: Snapchat is set to open its new worldwide headquarters in London in yet another post-Brexit tech boost

Good news: Snapchat is set to open its new worldwide headquarters in London in yet another post-Brexit tech boost

Base: Snapchat is in Lexington Street, Soho, but will be moving elsewhere as it continues to grow

Base: Snapchat is in Lexington Street, Soho, but will be moving elsewhere as it continues to grow

It is a major boost for Britain because it will have to pay tax on its international profits in the UK. Income tax and national insurance paid by staff and the business respectively will also go to the Treasury.

GIANTS IN THE DOCK: MAJOR FIRMS AND CORPORATION TAX

Facebook: The social media titan paid just £4,327 in corporation tax in 2014, despite reporting UK revenues of £105million.

Apple: The US-based technology firm behind the iPad and the iPhone made £34billion in profit during the year to September 2014.

Experts estimate that the UK accounted for £1.9billion of that profit, but the firm only paid £11.8million in British corporation tax.

Amazon: The online shopping giant took £5.3billion in sales from British shoppers in 2014 but paid just £11.9million in tax after announcing profits of £34.4million.

Starbucks: The coffee chain paid just £8.6million of tax over 14 years between 1998 and 2012 when sales totalled £3billion.

But latest company filings show it paid £8.1million in corporation tax for last year on profits of £34.2million.

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Snap Group Limited, the company's new UK arm, said: 'I am happy to confirm that the UK is the Snap Inc. family's hub outside the US. The UK's strong creative industries make this a great place to build a global business.'

The business has grown from six staff in the UK to 75 in the past year.  When its new offices are built they will recruit even more workers.

Claire Valoti, General Manager of Snap Group Limited in the UK: 'We believe in the UK creative industries. The UK is where our advertising clients are, where more than 10m daily Snapchatters are, and where we've already begun to hire talent.' 

Snap’s decision comes ahead of its initial public offering (IPO), which could see it list as early as March.

It would be the biggest flotation since Chinese e-commerce giant Alibaba’s IPO in 2014.

Snapchat launched in 2012 as a free mobile app allowing users to send photos that expire within seconds.

Its parent group announced last September it was renaming the company to Snap Inc as it develops further products, including sunglasses with a built-in video camera. 

The group's decision to base itself in London comes amid public and political anger over tax avoidance measures used by multi-national groups and US technology giants in Europe. 

In November Google gave Britain a Brexit boost by creating 3,000 new jobs to be housed in a new £1billion London super-headquarters - but still faces calls to pay its fair share of tax. 

New home: This is an aerial view of Google's planned £1bn HQ next to St Pancras, which will also house 3,000 new staff

New home: This is an aerial view of Google's planned £1bn HQ next to St Pancras, which will also house 3,000 new staff

Artist's impression: Google workers will work in open plan areas like this - and the 'campus' will have three buildings in total

Artist's impression: Google workers will work in open plan areas like this - and the 'campus' will have three buildings in total

The huge investment threw cold water on warnings from Remainers that global firms would shun the UK following the vote to leave the EU.

Google – which employs 4,000 people in the UK – has commissioned a new ten-storey building with a floor space of 650,000sq ft, equivalent to more than ten football pitches.

It has already committed to a further two buildings on the King's Cross Estate, which will eventually house 7,000 workers across three offices. 

Google has faced damning criticism because despite having thousands of staff it insists that it has no 'fixed base' in Britain. 

It means that Google's overseas tax rate on all its profits falls to around five per cent when in the UK it would have to pay 20 per cent. 

Apple is to create a new London headquarters inside the £9billion Battersea Power Station development for up to 3,000 staff - but it probably won't pay more UK corporation tax.

The Grade II listed building on the Thames with its iconic towers is key a feature of south London's skyline and will now become home to some 1,400 Apple workers but with room for more than double that figure.

The tech giant will occupy six floors - about half a million square feet of office space - in the central boiler house of the former coal-fired power station. 

But it appears Apple has no plans to move its international headquarters from Cork to the UK, where it currently takes advantage of Ireland's lower tax rate.

New home: Apple is going to move its London headquarters into the £9billion Battersea Power Station development with room for up to 3,000 staff

New home: Apple is going to move its London headquarters into the £9billion Battersea Power Station development with room for up to 3,000 staff

This arrangement allows the tech giant to funnel its non-US profits through its Irish offices, described by the EU as having no staff or premises, then on to its $178billion (£120bn) offshore fund. 

Fast food chain McDonald's announced in December that it is moving its non-US tax base to Britain from Luxembourg as it battles EU regulators over its tax affairs.

The chain is creating a new UK-based holding company through which its non-US royalties will be routed and it will pay UK corporation tax on its international profits.

The EU's competition commissioner Margrethe Vestager has put the tax affairs of a number of high-profile targets including Amazon and Google under the microscope.

Earlier this year, the EU slapped US tech giant Apple with a 13 billion euro (£11.4 billion) tax bill. 

HOW GOOGLE FUNNELS ITS MONEY VIA A WEB OF COMPANIES TO SHRINK ITS TAX BILL AND BUILD UP BERMUDA CASH POT

Web: This is Google's complicated web of holding companies that allows the web giant to reduce its international tax bill. Google US has set up two Irish companies, one of which is based in Bermuda, with a middle company in the Netherlands. The network allows revenue from around the world to be sent back to Bermuda via Ireland and Holland, with their generous tax rates, allowing Google to reduce its tax bill

Google manages to reduce its tax bill by using a set of subsidiary companies across the globe.

The network - nicknamed the 'Double Irish and Dutch Sandwich' - is hugely controversial but totally legal.

Google moved its headquarters for Europe, the Middle East and Africa to Ireland in 2008 to benefit from the country's lower tax rate on profits.

In Britain, its biggest market outside the US, Google is classified as having no 'fixed base' so none of its sales are technically made in the UK.

It means when a British company buys a Google advert for the UK, for example, the money goes straight to Dublin, meaning it pays little tax to the UK Treasury.

After paying Ireland's lower corporation tax rate of 12.5%, international profits are then funnelled via Google Netherlands Holdings, taking advantage of generous tax laws there.

The profits are then sent to Google's main overseas company, another Irish business domiciled in Bermuda - where the corporation tax rate is zero. 

This complicated arrangement is explained by experts as the Double Irish and Dutch Sandwich - with the Irish businesses being the bread and the Dutch subsidiary being its filling. 

It means that Google's overseas tax rate on all its profits falls to around five per cent when in the UK it would have to pay 20 per cent.

Though this process has been branded 'immoral' by MPs, it is not illegal and Google says it has abided by international tax rules. 

The company also says its Bermuda operation does not impact the tax it pays in the UK.

Executives say the reported UK profit margins are far below the group average because most of its algorithms and codes, which drive the company's profits, are developed outside the country.

Google still pays the majority of its taxes in America, but on its American profits only. 

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