The UK national press often complains about the practice of major US companies not paying their fair share of corporation tax.
Facebook, for instance, famously paid just £4,327 in UK corporation tax in 2014.
Others who have been in the firing line in recent years include Amazon, Starbucks and Google.
In an age when many artists are starting to think of their ‘brand’ as their own business, One Direction are leading the way.
The band’s members Niall Horan, Harry Styles, Zayn Malik, Liam Payne and Louis Tomlinson all became directors of their own UK business in 2010, 1D Media.
The fivesome – including now-departed member Malik – continue to own equal shares in 1D Media, which pulls in revenue from recording, touring and merchandising for the band.
1D Media has just filed its 2014 accounts with Companies House.
It reveals that One Direction turned over £73.7m in the year, with a post-tax profit of £34.98m.
That’s ‘post-tax’ profit, because 1D Media shelled out £10.47m to HMRC in taxation in 2014.
According to the firm’s filings, £8.24m of that figure was paid in UK corporation tax – 18.1% of its £45.4m pre-tax profit.
In total, 1D Media handed over 23% of its pre-tax profit to the UK taxman.
Some other notable points:
- 1D Media Revenue was significantly up year-on-year, increasing 50% from £49.1m in 2013
- Post-tax profit was up almost ten times, from £3.76m in 2013 to £34.98m in 2014.
- 1D Media paid out a whopping £44.3m in ‘administrative expenses’ in 2013, which dropped to £28.43m in 2014
- Liam Payne signs the financial documents for the band
- There are no other directors of 1D Media except the band (and Zayn Malik).
- The band also own 1D Live LLP.
- There’s a line in the 1D Media filing that will bring cheer to anyone who considers themselves pro ‘artist power’: “The directors consider the shareholders of the company to be the ultimate controlling parties.”
Music Business Worldwide