Online auction giant eBay paid only £1.2 million ($1.92 million, 1.47 million euros) in tax to the British government despite generating £800 million in sales in the country, the Sunday Times reported.
The auction site denied any wrongdoing.
According to the Sunday Times report, the internet firm notched up sales of £789 million during 2010 at its four British subsidiaries, generating an estimated profit of £181 million.
At the current rate of corporation tax, £51 million would be owed to the exchequer, but instead it received £1.2m, the report said.
The auction site told the BBC: "eBay in Europe works with tax authorities and complies fully with all applicable tax laws and regimes - including national, EU, and internationally recognised OECD rules."
The report comes days after it emerged that coffee chain Starbucks shifted profits from its £398 million worth of UK sales to its foreign subsidiaries in order to avoid paying any corporation tax.
Explore further: Yahoo profit surges on Alibaba divestment, mobile