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Microsoft's UK sales pass £2bn

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK

Microsoft’s (MSFT) sales in the UK passed £2bn last year, recently filed accounts show.

Accounts filed with Companies House this week show that Microsoft’s UK branch had revenues of £2.1bn in the 12-months to June 2018. That was up from £1.1bn in the 12-months to June 2017. The big jump was in part do to a shift to a new method of accounting for its sales.

Microsoft UK markets and sells everything from Office software to hardware like the Xbox, PCs, and tablets. Most of its revenue, £1.2bn, came from selling and licensing products, while the rest came from services such as customer support.

Pre-tax profit rose from £106m in 2017 to £137m last year. However, Microsoft’s UK tax bill fell slightly from £29.1m to £28.1m. This was due to a slight fall in UK corporation tax from 19.75% to 19%, as well as lower charges for depreciating assets and a £1m “adjustment” in Microsoft’s favour.

A spokesperson for Microsoft told Yahoo Finance UK: “Microsoft’s business is evolving from primarily licensed software to an expanding portfolio of cloud services, platforms and devices.

Satya Nadella, CEO of Microsoft. Photo: Sean Gallup/Getty Images

“In February 2017 Microsoft implemented a change to the way we sell and recognise revenue in a number of countries including the UK. Microsoft Subsidiaries in these markets sell offerings to partners and customers located in these countries and all revenue and expenses from these local sales are now reported locally.”

The tech giant’s UK headcount fell from 3,046 to 3,024, while staffing costs including pension contributions rose slightly from £439.9m to £445.7m. Directors wrote in their accounts that a key performance indicator — return on investment in employees — rose from 18% to 25%.

Microsoft UK paid a dividend of £121m to its Bermuda-registered parent company last year, up from £113.6m in 2017.