How to protect yourself from snoopers

By Dyenamic Solitions - Last updated: Thursday, January 19, 2017

Now that the Investigatory Powers Act 2016 AKA Snooper’s Charter – is law, how can you protect yourself from government snoopers?

Now that the Investigatory Powers Act 2016 AKA Snooper’s Charter – is law, how can you protect yourself from government snoopers?

The new law forces internet service providers to keep a record of all the websites you visit for up to a year. It also obliges companies to decrypt data on demand and gives government security services the power to hack your computers, tablets, mobile phones and other devices.

Jim Killock, the director of Open Rights Group, described it as the “most extreme surveillance law ever passed in a democracy”. It more or less removes your right to online privacy.

The law forces internet service providers to keep a record of all the websites you visit for up to a year..

To some extent, the new law merely legalises the current “custom and practice” as revealed by Edward Snowden.

The most obvious difference is that it makes your web history readily available to almost 50 assorted police forces and government departments. These include the British Transport Police, the Department of Health, the Food Standards Agency, the Gambling Commission, and the Welsh Ambulance Services NHS Trust.

When you sign up with an ISP, the traffic from your PCs and other devices goes to your ISP’s servers, which feed most of it – except various blocked websites – on to the internet. You can track this process yourself using TraceRoute.

Your ISP therefore knows where you are going online. You can avoid this by using one or more anonymous “proxy servers” between your PC and your eventual destination. Your ISP will then know you visited the proxy server, but, if the anonymising is done properly, it won’t know where you went from there.

Most people aren’t interested in proxy servers, but often end up using them. For example, British people travelling or living aboard use UK-based proxy servers to watch TV programmes on BBC iPlayer, while people outside the US use American proxies to access Netflix and other services.

There are two big problems with using free proxies. First, you may not know who’s running them. They could be helpful hackers or criminals, or even CIA honeypots. Second, they may be unreliable and slow.

It’s better to use a virtual private network or VPN.

Multinational corporations have long used VPNs as a way of extending their private networks across the public internet. If they encrypt all the traffic between computers in their British, American and other offices, they can send their traffic securely over the internet without paying for expensive leased lines. VPN service providers offer the same facilities to ordinary users for a small monthly fee.

The traffic from your PC is automatically encrypted and sent to the VPN supplier’s server, so your ISP can’t see the final destination. The ISP’s records should only contain the VPN company’s server addresses.

Not many people use VPNs. However, I recommend them to people who travel a lot or work from public Wi-Fi hotspots, because they protect your traffic from snoopers who steal passwords – or worse. I also recommend them to people who are potential targets for other reasons. They might be diplomats, film stars, bankers or anyone with commercially sensitive data.

The next Dyenamic Solutions post will be how you can set up a VPN.

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Amazon makes first drone delivery

By Dyenamic Solitions - Last updated: Friday, December 16, 2016

Amazon has made its first commercial delivery using a drone, in the UK.

Amazon has made its first commercial delivery using a drone, in the UK.

The package arrived safely at its destination in Cambridge, 13 minutes after being ordered.

A video showing the process details how the order was completed using an electrically powered drone flying at up to 400ft.

As part of the testing for the Amazon Air service, the delivery took place on 7 December, although it was only revealed on 14 December.

The Cambridge fulfilment centre is home to the drones, which, once the ordered package is on board, travel along an automated track to the launch area.

The drones then take off and fly completely autonomously, guided by GPS to their destination.

They are capable of carrying items weighing up to 2.7kg (5lbs).

The aim is that all orders made using Amazon Air will be delivered within 30 minutes.

The trial will be expanded to dozens of customers living close to the warehouse in the coming months.

The safety of drones has come under the spotlight in recent months.

There have been reports of near-misses this year between drones and aircraft at London Stansted and Cornwall Airport Newquay.

“Safety is our top priority,” Amazon said on its website. “We are currently permitted to operate during daylight hours when there are low winds and good visibility, but not in rain, snow or icy conditions.”

There are Prime Air development centres in the US, UK, Austria and Israel. The company is also testing its drone vehicles in “multiple international locations”.

The real significance here is the impact it has on shopper expectations. Last year, same day delivery was considered impressive; now it’s all about 13 minute lead times.

Fulfilment has become a firm battleground in retail and the most successful retailers today are those who can deliver products to shoppers in the quickest, most convenient and economical way.

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Blockchain bandits hit crypto start-ups

By Dyenamic Solitions - Last updated: Wednesday, November 16, 2016

There is a growing interest by hackers in fledgling firms seeking to build businesses around blockchains and digital currencies.

There is a growing interest by hackers in fledgling firms seeking to build businesses around blockchains and digital currencies.

That is troubling given the current fever of interest in the blockchain. Many see it as the element of the Bitcoin crypto-currency that will have lasting influence.

Visa has announced plans to launch a blockchain payments service in 2017, central banks are investigating the technology and many finance firms are keen to use it to keep track of the deals they do.

The blockchain is the open accounting system underpinning Bitcoin. It involves large networks of computers working together to do the complicated cryptography-based maths that verifies who spent which bitcoins and where they spent them.

For a well-established virtual currency such as Bitcoin, there are huge numbers of people helping crunch numbers via server farms they own and operate. The vast size of the processing pool means there is little chance that any individual will be able to amass enough computer power to subvert the blockchain and effectively print their own money.

That’s not the case with the fledgling crypto-currencies, says Garrick Hileman, an economic historian at the University of Cambridge.

“More than 600 different crypto-currencies have come out since Bitcoin emerged in 2009,” he says. “A lot of the crypto-currency knock-offs have been attacked.”

Many of those attacks are aimed at the wallets where the digital cash is kept, but others have gone after the blockchains they use to keep track of transactions. By their nature, says Dr Hileman, these start-ups do not have many servers verifying who is spending or using what making them vulnerable to an attacker with processing power at their fingertips.

“It’s all about how much computer power you have,” he says, adding that there are well-known defences against cyber thieves who try to hijack the system.

“There are variations in how blockchains are made secure. Some are more vulnerable than others depending on the attack surface that’s available.”

It’s one that has proved popular with attackers since it was developed by a firm called Ethereum, which is looking to use the technology as the basis for its own business. One of Ethereum’s offshoots, called the DAO, suffered a serious blockchain-based attack earlier this year.

Ever since, this offshoot has been under repeated attack and last week instituted significant technical changes to thwart the hackers targeting it. It’s not clear yet whether it worked.

Many are tracking its success in defeating the hackers because of the backing Ethereum has won from venture capitalists and other investors. Millions of dollars in development cash is tied up in its crypto-currency network.

That ability to adapt and change to defeat cyberthieves shows how blockchain technology can be made secure, says Prof Ari Juels, a computer scientist at Cornell Tech and co-director of the Initiative for CryptoCurrencies and Contracts which studies the technology and its uses.

“Ethereum has showed just how resilient crypto-currencies can be in the way that it has unwound the damage done by the attacker,” he says, adding that it, and virtual currencies in general, are still going through some “growing pains”.

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$10 router blamed in Bangladesh bank hack

By Dyenamic Solitions - Last updated: Sunday, October 16, 2016

Hackers managed to steal £56 million from Bangladesh’s central bank because it skimped on network hardware and security software.

Hackers managed to steal £56 million from Bangladesh's central bank because it skimped on network hardware and security software.

The bank had no firewall and used second hand routers that cost $10 to connect to global financial networks.

Better security and hardware would have hampered the attackers, Reuters said, quoting an official investigator.

The hackers aimed to steal $1 billion but made mistakes that led to the theft being spotted and stopped.

A firewall would have made attempts to hack the bank more “difficult”, Mohammad Shah Alam, a forensic investigator who works on the Bangladesh team investigating the theft, told Reuters.

The second hand hardware also meant that basic security steps to segregate network traffic were not taken, he said.

The cheap routers have hindered the investigation, said Mr Alam, because they collected very little network data that could be used to pinpoint the hackers and shed light on their tactics.

The hack took place in early February and involved hackers getting access to the core network of Bangladesh’s central bank. They used this privileged access to transfer cash from Bangladesh’s account at the Federal Reserve Bank of New York to other banks.

A spelling mistake in one of the transfer orders alerted bank staff and meant the hackers only managed to steal $81m. This has been traced to accounts in the Philippines and to casinos in the same country. Most of the cash has yet to be recovered.

Bank security experts said the bank should have spent more time and money protecting the network for its central bank.

You are talking about an organisation that has access to billions of dollars and they are not taking even the most basic security precautions.

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How Nasa is teaching us how to live more sustainably

By Dyenamic Solitions - Last updated: Friday, September 16, 2016

Nasa astronauts who spend months on end in orbit have to learn to make do and mend in the best tradition of sustainability.

Nasa astronauts who spend months on end in orbit have to learn to make do and mend in the best tradition of sustainability.

Missions to bring fresh supplies are expensive and time consuming. For any astronauts who take on a mission to Mars, planned for the 2030s, with the round trip likely to take two years, life would be even tougher.

That prospect has helped focus minds at America’s space agency, Nasa, on clever ways to provide for daily needs in challenging conditions. But the lessons being learned are also proving to have knock-on benefits down here on Earth.

As Cady Coleman, a Nasa astronaut and innovation lead, explains: “We basically have a limited environment in space, and it causes us to think about how we get stuff there, how we maintain it, and how we get most use out of it.”

Ms Coleman says space can be a fantastic “technology accelerator” – and that sustainable technologies devised by Nasa often find themselves repurposed for use on Earth.

Firms such as Nike, DIY giant Kingfisher and Ikea are already pursuing so-called closed loop business models – where waste is eliminated through repurposing and recycling – in the hope of being greener and cutting costs. And with pressure on water and fertile land growing, farmers are seeking less input-intensive methods.

So what can be learned from Nasa’s research?
1. Growing food

Take Nasa’s decades of research into growing vegetables in space, which culminated in astronauts harvesting and eating lettuces aboard the International Space Station (ISS) last year.

The crew grew the produce in “seed pillows” – a modified version of the common grow bag – and used specially designed, energy-efficient LED lights to power photosynthesis, an idea that originated with Nasa back in the late Nineties.

The lights, which use more growth-inducing red and blue-coloured LEDs than green ones, have also become instrumental in the rise of so-called vertical farming back on Earth, a highly sustainable form of agriculture.

Such farms grow produce on shelves indoors to optimise use of space and water, and could help feed a rapidly growing global population in the future, say proponents.

2. Clean water

In space, water is in short supply, so Nasa has developed an innovative way to filter waste water on the ISS using chemical and distillation processes. This lets it turn liquid from the air, sweat and even urine into drinkable H2O.

In fact, since 2008, more than 22,500 pounds of water have been recycled from urine alone on the ISS – something that would have cost more than £160 million to launch and deliver to the station from Earth.

“Most people are horrified when they see what we drink!” says Ms Coleman. “But the filtered water up there just tastes beautiful, it really is delicious.”

Nasa has since licensed the technology to companies on Earth, which have created portable filters for use in places where fresh drinking water is scarce.

Nasa is also funding research into whether human faeces can be recycled into food on long space missions – although it seems unlikely that such an extreme solution would catch on back on Earth.

3. Recycle your tools

Ms Coleman points out that “down here, we can pretty much all go to the hardware store to buy tools – but our situation in space drives us to be more resourceful and to renew, reuse or recycle tools.”

As such, Nasa is experimenting by 3D printing tools out of hard plastic on board the ISS.

“We could need a tool, get a design for a tool sent up, print a tool and then reuse that material to print other tools,” says Ms Coleman.

Researchers from NASA’s Ames Research Centre in California are also looking into the problem of litter, which can clutter up a shuttle or space station.

4. Green buildings

Nasa’s Ames centre has constructed a green building on its campus in Moffett Field, California, where energy-saving technologies of the future are being tested.

Sustainability Base leaves “virtually no footprint” and uses several innovations from space, including solid oxide fuel cells of the type found on Nasa Mars rovers to generate electricity, and a system that reuses wastewater to flush toilets.

These buildings represent the culmination of an overall philosophy that consuming resources should be done, wherever possible, according to closed loop principles, without exhausting supplies or creating unnecessary waste.

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Wearable tech giving sports teams winning ways

By Dyenamic Solitions - Last updated: Tuesday, August 16, 2016

Wearable technology is playing a growing role in sport all over the world.

Wearable technology is playing a growing role in sport all over the world.

Ftom the UK’s football Premier League, to Aussie Rules Football, the first to pioneer the use of location-tracking GPS devices in 2004.

Analysis of data transmitted to the cloud from increasingly sophisticated sensors is helping teams keep their players at the peak of physical fitness.

Leicester City Football Club, for example has also had the fewest injured players over the season, a fact that may have a lot to do with the club’s clever use of technology.

Players wear Catapult Sport’s OptimEye S5 device, which collects data relating to acceleration, direction, position and, crucially, the impact of collisions. These sensors can collect 800-900 data points per second.

Scott Drawer, formerly Rugby Football Union’s performance manager and now with cycling’s Team Sky, says: “It may be that they have been using the data in a much smarter way to rest, rotate and recover players appropriately.

“Fundamentally, they are able to have their best players available a lot more, so there is no doubt some of their processes are helping them to do that.”

Rival club Southampton FC makes its players wear GPS units during training, and Alek Gross, the club’s head of sports science, says players have experienced fewer soft tissue and overuse injuries since introducing the tech.

And Richard Byrne, business administrator at StatSports, another tracking device manufacturer, says: “One of our biggest European clients recently reported having only 20 muscular injuries last season once they started using wearable technology, compared to 44 the previous season,” he says.

Rugby has also been a big convert to this type of analysis.

Every club in UK rugby union’s Aviva Premiership – and a number of international sides – has adopted the tech, with players wearing GPS units between their shoulder blades to measure speed and distance covered while training and playing.

“Heavier rugby players often find that if they run over a certain distance in a week they can inflame an Achilles tendon, so some want to spend more time off their feet to maintain fitness and minimise injury risk,” explains Corin Palmer, head of rugby operations for Premiership Rugby.

“Wearable technology is able to monitor that load on a day-by-day basis to ensure those players are not just injury-free but in peak condition for competition,” he adds.

When it comes to American football, NFL team the Cincinnati Bengals uses Viper Pods – monitoring devices made by StatSports – for GPS data collection during on-field training sessions.

Players also wear Polar heart rate monitors during conditioning sessions and circuit weight training, to monitor response to the training load.

“Anytime you can quantify what you are doing, it allows you to see the results in concrete terms,” says Chip Morton, the Bengals’ strength and conditioning coach.

“Having the data from wearable technology has helped the head coach to make positive adjustments to our weekly practice schedule. The data can also alert us to the recovery and preparation needs of the individual athletes.”

But while wearable tech provides reams of data, it is what you do with it that counts.

Bill Gerrard, professor of business and sports analytics at Leeds University Business School, has worked with the Saracens rugby team and with baseball’s Oakland Athletics, whose executive vice president of baseball operations, Billy Beane, was made famous in the film Moneyball.

Mr Gerrard believes the ultimate goal is to combine data from wearables with other data sets, such as tactical analysis of previous games and opponents’ playing styles.

“That is where the cutting edge is – pulling tactical and physical data together to optimise training workloads on an individual basis.”

But can too much data mean you lose sight of the ball?

“Our greatest asset is that we coach players and not spreadsheets,” Mr Gross reminds us. “If you don’t understand the context in which the numbers were found, they don’t mean an awful lot.”

And it’s not just about fitness, he suggests.

Revered football players like Bobby Moore and Franz Beckenbauer “read the game so incredibly well,” he says, “they didn’t need to sprint to get into position.”

But if you don’t have that degree of natural ability – and you’re a bit lazy, frankly – the data will catch you out.

 

Southampton FC’s Mr Gross observes that under-training increases the risk of injury.

“If a player hasn’t hit a certain percentage of high speed runs during a given week, for example, they are more susceptible to a hamstring injury.

“The GPS data has been useful because when we individualise training programmes we can see if people drop below or above a certain point.”
Coming to you, live

This kind of data is also used real-time analysis during matches by some Premiership and international rugby teams, including England and Ireland, helping to inform their decisions about when to make changes.

“You can see the coaches with laptops in the stands; they have a constant live feed on each player, their fatigue index, collision load, distance covered et cetera,” says Mr Byrne.

Premiership football teams are also now allowed to use wearable devices during games, although the data gathered can’t be applied in real-time. Yet.

In this data-saturated age, sporting purists may take some comfort from the fact that natural born skill still matters.

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GDPR- what does shake up of EU data laws really mean?

By Dyenamic Solitions - Last updated: Tuesday, July 19, 2016

The GDPR laws are intended to give power back to citizens over how their data is processed and used

The GDPR laws are intended to give power back to citizens over how their data is processed and used

The data protection regulation’s stated aim is to give citizens back control of their personal data as well as simplifying the regulatory environment.

It could mean huge fines for companies that breach the law and offer some complex problems about how they store, delete and return data to citizens.

It is a modernisation of data protection laws drawn up in 1995, before mass internet adoption.

Four years in the making, the new laws’ stated aim is to strengthen the rights individuals have over their data and make companies take the issue of data protection far more seriously.

The rules will come into force in the summer. Then, member states will have two years to comply.

The most significant change will be an increase in the amount of money regulators can fine companies who do not comply with the legislation – up to 4% of their global turnover or 20m euros (£15.8m), whichever is greater.

 

Businesses will also be required to show how they are complying with the legislation.

It also makes it mandatory for large companies to employ a data protection officer. Data breaches, for example, must be reported within 72 hours.

The legislation will apply to any company that handles EU citizens’ data, even if that company is not based in Europe.

It has long been argued consumers often have no idea what happens to their data once they relinquish it to the big technology companies, and it is unclear whether this new set of rules will change that.

Companies will have to be more transparent about how they are using data, but this is likely to translate as even more complex privacy policies individuals, if they read them at all, may not fully understand.

There are provisions that could increase consumers’ rights over their data, but there are big questions about how they will apply in practice.

For example, the controversial right to be forgotten is being extended beyond web searches to all aspects of online life – so someone could ask Facebook or another social network to delete their profile entirely.

It is unlikely to extend to news articles that people want removed, which are likely to be protected under freedom of expression rules.

Similarly, there is provision in the new regulation for consumers to transfer their data from one service to another.

This could be a massive boon for consumers – allowing them to swap internet or email provider more easily and to shop around for services such as utilities and insurance.

Questions arise though over how companies would actually give data back, in what format and, more crucially, what data the user is considered to have provided.

Privacy is now big business, with consultants and lawyers lining up to advise companies on how to implement the changes and make sure their policies and procedures are in order.

The need to have more data protection officers could make companies go on a recruitment drive, but whether there are sufficient people to fill such posts is less clear.

Companies could see more legal challenges from individuals and consumer groups that take up privacy issues on behalf of citizens, but they may also see less challenges from individual country regulators, because of a “one-stop shop” clause that would put the onus on the regulator in the country in which the company is headquartered to pursue legal action.

 

This could mean regulators take a tougher line on US technology companies such as Google and Facebook.

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Google’s AI wins final Go challenge

By Dyenamic Solitions - Last updated: Thursday, June 16, 2016

Google’s DeepMind artificial intelligence has secured its fourth win over a master GO player.

Google's DeepMind artificial intelligence has secured its fourth win over a master GO player.

Lee Se-dol, one of the world’s top Go players, won just one of the matches against the AlphaGo program, missing out on the $1m prize up for grabs.

Demis Hassabis, founder of DeepMind, said the match had been the “most exciting and stressful” for his team.

In Go, players take turn placing stones on a 19-by-19 grid, competing to take control of the most territory.

The game is considered to be much more challenging for computers than chess.

At a press conference held after the final match, Mr Lee said he did not necessarily think AlphaGo was superior to humans.

But he said he had more studying to do, and admitted the matches had challenged some of his ideas about the game Go.

In some countries the people watch football on big screens in public squares, but in South Korea it’s been the mighty challenge of machine against humanity.

 

In a spirit of magnanimity, however, the Korea Baduk Association – which governs the game of Go – has decided to give an honorary ninth-dan ranking to AlphaGo.

Go was invented about 2,500 years or so ago in China.

The five match challenge began in Seoul on 9 March, where AlphaGo scored its first victory.

 

DeepMind’s winning streak meant it won the $1m (£702,000) prize on offer. Google said the money would be donated to Unicef, Stem (science, technology, engineering, and maths) charities and Go organisations.

Mr Hassabis said: “We have been lucky to witness the incredible culture and excitement surrounding Go.

“Despite being one of the oldest games in existence, Go this week captured the public’s attention across Asia and the world.”

The AlphaGo system was developed by British computer company DeepMind which was bought by Google in 2014.

It has built up its expertise by studying older games and teasing out patterns of play.

Lee Se-dol did win the fourth match against AlphaGo, after which he said: “I’ve never been congratulated so much because I’ve won one game.”

 

To beat one of the world’s top players, Deep Mind used a mixture of clever strategies to make the search much smaller.

Does this mean AI is now smarter than us and will kill us mere humans? Certainly not.

AlphaGo doesn’t care if it wins or loses. It doesn’t even care if it plays and it certainly couldn’t make you a cup of tea after the game.

Does it mean that AI will soon take your job? Possibly you should be more worried about that.

Using black-and-white stones on a grid, players gain the upper hand by surrounding their opponents pieces with their own.

The rules are simpler than those of chess, but a player typically has a choice of 200 moves, compared with about 20 in chess – there are more possible positions in Go than atoms in the universe, according to DeepMind’s team.

It can be very difficult to determine who is winning, and many of the top human players rely on instinct.

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The history of the @ sign

By Dyenamic Solitions - Last updated: Monday, May 16, 2016

The @ character is the symbol of the internet age, crucial for emails and social networking.

The @ character is the symbol of the internet age, crucial for emails and social networking. 

The “at sign” was once an obscure symbol known only to bookkeepers. That changed thanks to Ray Tomlinson, the man widely regarded as the inventor of the email.

He plucked it from his keyboard in 1971 to go between the user name and destination address when sending a message between two computers in his office.

Tomlinson chose @ because it was then rarely used in computing, so wouldn’t confuse early programs or operating systems. In a happy coincidence, the English name of the symbol was already “at”.

“The @ symbol appeared on typewriters before the end of the 19th Century,” says Keith Houston, author of Shady Characters: Secret Life of Punctuation. “It seemed to be a general symbol that meant to readers ‘this is this many items at this price’. It didn’t have a use beyond this.”

As typewriters had it, so did the first proper keyboards for computers.

“The @ symbol made it on to keyboards because it was a business tool and had a business use,” says Houston.

Those business users understood it as a symbol to indicate unit price eg 12 batteries @ £1 each.

In 2000, the Italian academic Giorgio Stabile observed that many nations use different words for the @ symbol that describe how it looks. In Turkish it means “rose”, while in Norwegian it means “pig’s tail”. In Greek it is “duckling”, while in Hungarian it is “worm”.

But Stabile noticed in French, Spanish and Portuguese, it referred to arobase or arroba – a unit of weight and volume. In Italian the name for the symbol was “amphora”, referring to long-necked pottery storage jars that had been used since ancient times.

Stabile discovered a letter sent from Seville to Rome in 1536, which discussed the arrival in Spain of three ships sailing from the New World. It stated that an amphora of wine was sold and “amphora” was replaced with the @ symbol as an abbreviation.

Stabile concluded the @ symbol was a common medieval shorthand for units of measure in southern Europe, even if the precise units differed.

Spanish journalist Jorge Romance then found an even earlier use. “I read about the 16th Century example of @ and remembered I had seen the symbol before when I was a history student at the University of Zaragoza. I went through my old papers and found customs records between Aragon and Castile in the 15th Century. It meant ‘arroba’ as a weight measure, and in this instance one arroba of wheat.”

But the earliest yet discovered reference to the @ symbol is a religious one.

It features in a 1345 Bulgarian translation of a Greek chronicle. Held today in the Vatican Apostolic Library, it features the @ symbol in place of the A in the word Amen. Why it was used in this context is a mystery.

It seems fitting then that the first email to be sent with the @ symbol has also been lost to time.

When Tomlinson sent the first message to tomlinson@bbn.tenexa, he didn’t realise what a game-changer it would be and so didn’t bother writing it down.

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Facebook to pay millions of pounds more in UK tax

By Dyenamic Solitions - Last updated: Saturday, April 16, 2016

 

Facebook is set to pay millions of pounds more in tax in the UK after a major overhaul of its tax structure.

Facebook is set to pay millions of pounds more in tax in the UK after a major overhaul of its tax structure.

After heavy criticism that it was avoiding tax, it is now understood that profits from the majority of Facebook’s advertising revenue initiated in Britain will now be taxed in the UK.

It will no longer route sales through Ireland for all of its advertisers.

That includes major businesses such as Tesco, Sainsbury’s, consumer goods firm Unilever and advertising giant WPP.

Smaller business sales where advertising is booked online – with little or no Facebook staff intervention – will still be routed through Ireland, which will remain the company’s international headquarters.

The change will mean that Facebook will account for substantially more revenue in the UK and will therefore pay a higher level of corporation tax on the profits it makes here.

Corporation tax is levied at 20% on the profits a business makes.

The changes will be put in place in April and Facebook’s first, higher, tax bill, will be paid in 2017.

My sources tell me that Facebook moved after coming under increasing global pressure on its tax affairs and as a reaction to changing tax rules.

There was widespread controversy when it was revealed that Facebook paid £4,327 in corporation tax in the UK in 2014, despite Britain being one of the company’s biggest markets outside the US.

Globally, the company makes more than £1bn of profit every three months. It does not reveal figures for how much business it does in the UK.

The government’s new diverted profits tax was also likely to have a punitive effect on the business in Britain.

That tax is set at 25%, higher than the corporation tax rate, and is aimed at companies which use “contrived” structures to move profits out of the country.

Facebook executives will be told about the changes this morning.

What this means in practice is that UK sales made directly by our UK team will be booked in the UK, not Ireland. Facebook UK will then record the revenue from these sales.

 

At this stage, it is not possible to say precisely how much tax Facebook will pay.

It is not under any regulatory obligation to reveal the size of its UK business until it reaches 10% of its global operations, which generate revenues of nearly £12.7 billion a year.

But the importance of Britain to Facebook is revealed by the fact it employs 850 people in the UK and is building a new headquarters in London.

Facebook has now said that those staff are doing “value-added” work, a key issue in the setting of tax rates.

Before this new structure, Facebook’s UK revenues were based on a fee payment from Facebook Ireland, which meant that its actual sales here did not affect its tax bill.

That is a similar structure to Google UK, which is paid by its US parent firm for operations in Britain.

Google has also faced controversy over its tax affairs.

 

There has been speculation that Facebook is also the subject of an inquiry by HMRC over its tax structure, but the social media giant has refused to confirm or deny there is any live process.

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