Twitter, which is tipped for an $11bn (£7.3bn) stock market flotation in New York, has filed small company accounts in Britain, reporting retained profits last year of just £92,408.
The abbreviated UK accounts point to the booming company using controversial corporate structures in Ireland to book fast-growing sales from British advertisers. Such a move means any resulting profits from these sales would not be subject to UK tax.
Google has faced an outcry in recent months for similar arrangements. It told HMRC its UK sales were "closed" in Ireland, even though some of its extensive UK sales staff and customers believed otherwise.
In May, Margaret Hodge, chair of the public accounts committee, told Google's northern Europe boss, Matt Brittin, she had received evidence from several Google tax whistleblowers, leading her to conclude that his company's behaviour on tax was "devious, calculated and, in my view, unethical". There was no suggestion Google broke the law.
A spokesperson for Twitter in London refused to confirm that UK sales were routed through Ireland, noting the business was privately owned. In a statement, the company said: "Since Twitter UK opened in 2011 we have been steadily building our team, focusing on promoting great uses of Twitter by all elements of UK society – the arts, sport, government, and brand partners."
The company said its Dublin office employed 100 people and 60 staff at its central London offices. The group's heads of policy, mid-market sales, legal and finance for EMEA (Europe, the Middle East and Africa) are all said to operate out of Dublin. Meanwhile, the UK director of sales, UK director of partnerships and UK general manager work in the London office, alongside software engineers and managers who had previously worked for Tweetdeck, acquired by Twitter two years ago.
Twitter UK is owned by Twitter International, a business registered in Ireland. Like many technology multinationals, Twitter has chosen to headquarter much of its non-US business in Dublin, setting up unlimited Irish companies which are not required to file accounts.
Irish accounting experts say there is rarely any reason for using unlimited companies other than the secrecy they afford the owners.
In the UK small companies are allowed to file abbreviated accounts if they meet two of three conditions: having turnover less than £6.5m, a balance sheet under £3.26m or fewer than 50 staff.
The latest abbreviated accounts for Twitter UK reveal only very limited information. There is no turnover or pretax profit disclosed for 2012. However, retained profits are given as just £92,408, compared with £16,500 for 2011. Retained profit is the profit remaining in the business after the payment of tax and dividends. It is thought unlikely that Twitter UK is paying significant dividends.
So-called "promoted" adverts – the main revenue stream for Twitter – started appearing on users' feeds in 2010 in the US, and in Britain in September the following year. The UK was one of the first overseas markets targeted. Among the first advertisers in the UK in the autumn of 2011 were Sky, BT, Eurostar, Electronic Arts and Paramount Pictures UK.
In January the research firm eMarketer said that Twitter was estimated to have taken $288m in global advertising revenues, a figure that was projected to rise to $545m this year and $807m by 2014.
The US only accounts for about 10% to 20% of Twitter's estimated 200m active users around the world. According to estimates from eMarketer, the more commercially mature US market will still generate 83% of the group's advertising revenues for 2013.
The wider multinational business, Twitter Inc, also discloses only very limited financial information. It is based in San Francisco but incorporated in the US secrecy haven of Delaware.
Asked recently about the likely date of a stockmarket listing, Twitter chief executive Dick Costolo said: "I'm not thinking about that right now … I'm trying to run this business and build this business." Costolo resigned from Twitter UK in May.
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