back to article Stop us if you've heard this one: Microsoft UK enjoys a jump in profits, pays a bit less in tax

Microsoft's UK operation has published its annual report for the year ending June 2018, which showed the company cracking the £2bn barrier in turnover but, er, paying a bit less tax than last year. The software giant, whose UK staff numbered 3,024 (down from 3,046 the previous year), saw its revenue climb to £2.1bn, up from a …

  1. SVV

    Sales costs / turnover

    a turnover increase from a restated £366m to £1.4bn.

    the cost of sales jumped similarly as 2017's £321.8m costs climbed to £1.3bn,

    So they previosly earnt £1.14 in turnover from every pound they spent on sales? And that ncreased to £1.36? On the back of a 383% increase in turnover?

    I have no idea how they managed this, but it doesn't sound like any sort of business operation I can imagine.

  2. Anonymous Coward
    Anonymous Coward

    Accounting for growth...

    Recognising licence income at once rather than over the anticipated life of the licence _may_be_ significant.

    The uncrystallised pension scheme gains (less imaginary tax) amount to counting chickens before they're (fully) hatched. In that context it would be more relevant to know if the pension scheme was fully funded.

    The 'non current receivables' up from £2m to £114m also raises questions.

  3. Yet Another Anonymous coward Silver badge

    Margins

    They are a software business, with product that can be reproduced in unlimited quantities for free and they only make 5% profit ?

    Have they considered packing in the software business and just selling Microsoft branded coffee mugs on ebay ?

    1. Richard 12 Silver badge

      Re: Margins

      Those turnover numbers make no sense at all.

      They look like an accounting falsehood designed to appeal to the vanity of a CEO, rather than a realistic amount of money changing hands.

      1. Chris G

        Re: Margins

        Looks like an accounting falsehood designed to sucker the taxman too.

        1. Rich 11

          Re: Margins

          And just when the taxman is already kept busy trying to rewrite rules and redesign forms to suit an ever-changing Brexit.

    2. TheVogon

      Re: Margins

      Because the software licences are probably purchased from a Microsoft subsidiary in say Bermuda and that's charged at say 90% of retail.

      1. Danny 14

        Re: Margins

        plus logo branding, expensive stuff.

  4. Timmy B

    Why bother reading this stuff...

    I learned, long ago, that there is how a company is actually performing and what the accountants tell everyone else. It's all designed to appeal to the taxman, to shareholders, or to the people that may employ execs when they leave.

    1. LucreLout

      Re: Why bother reading this stuff...

      or to the people that may employ execs when they leave.

      Usually nobody, as it happens. Paying for talent, at the top, is a barely disguised myth. Most FTSE 100 CEO's have never led another FTSE 100 company and most never will. There is no next job.

      What they end up doing is whiling away their time in the charity/non-profit sector because despite what they said at the time, they weren't really in it for the money as much as for the power. When they go to work, everyone listens, everyone obeys, and everyone wants their time. When they go home, their wife & kids don't listen to them any more than mine listen to me or yours listen to you, and they simply have nothing to do.

      CEO pay could be half or less what it is now and you'd still have exactly the same people queuing up to do exactly the same job with the same level of focus and effort.

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