US auction site eBay only paid 0.15 percent of tax on sales worth some £789 million in the UK during 2010.
An investigation by the Sunday Times found that the £1.2 million tax bill fell substantially short of the £51 million it would have paid if it had followed standard corporation tax guidelines.
This latest tax scandal will likely pile pressure on the coalition government, following recent talk from the Prime Minster that he is planning to carry out a further round of benefit and welfare cuts to help aid the reduction plans for the deficit.
The Sunday Times used eBay’s worldwide profit margin of 23 percent to estimate that it would have made a profit in the UK of £181 million in 2010.
eBay, which owns PayPal, has said that it "complies fully with all applicable tax laws".
It has also emerged that internet giant Amazon is asking its publishers to pay a full 20 percent of VAT on ebook sales in the UK - even though it only has to pay 3 percent to teh Exchequer because it is based in Luxembourg.
This amounts to an extra £1.38 profit every time it sells a £10 ebook in the UK, according to the Guardian.
These stories follow the news that Google’s UK business paid just £6.09 million, or 1.5 percent, of tax in 2011 on turnover of £395 million.
It was revealed last year that Google’s UK practice had paid just £935,000, or 0.4 percent, of tax revenues of £239 million.