Why doesn't HM Revenue poke Facebook? Facebook's European headquarters is in Dublin, where corporation tax is a mere 12.5pc. In its accounts, Facebook UK describes its "principle activity" as "providing marketing and sales support" to Facebook Group, via the headquarters in Ireland. So if Facebook UK sells advertising here, it's doing so on behalf of the Dublin office, through which all the sales flow. Like all countries, Britain's "transfer agreements," which are designed to stop companies merely basing themselves where ever tax is lowest, allow the HMRC to agree the value of those services for tax purposes. The agreement isn't in the account, but Facebook UK says its services to Dublin - a sort of commission - was worth £20.4m in 2011. Fixed costs - staff pay, office rent and so on - are tax deductible. Facebook has listed salary and National Insurance costs as £9.3m. On top of that the company offered a shares-based remuneration deal worth £15.4m, which is a further cost to the company and tax deductible too. Facebook UK made a £13.9m loss last year. The tax structure is open to all but appear most distorted in technology companies because, being digitally-based, the location of the service they provide is hard to pin down. Mike Warburton, partner at Grant Thornton says: "A widget factory in the UK can't claim to be providing a service for another company abroad - the widgets are clearing made and sold in the UK. Tech companies can easily be based elsewhere. Facebook isn't doing anything wrong and the Government would find it hard to change the rules without dissuading fast-growing companies from coming here. If the Government concludes that tech companies aren't paying their way, experts say fiddling with corporation tax isn't the best approach. Instead, ministers could look at imposing a charge for them to contribute to the infrastructure they use - namely broadband. Like the debate over the charges foreign lorries should pay for using British roads, tech companies could be charged a license fee for the internet. The fact remains, these companies are highly mobile and if the Government doesn't want to lose the current benefits of employment and income tax, it needs to be careful how it pokes them.