Online auction giant eBay paid only 1.2 million pounds ($1.92 million, 1.47 million euros) in tax to the British government despite generating 800 million pounds 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 pounds during 2010 at its four British subsidiaries, generating an estimated profit of 181 million pounds.

At the current rate of corporation tax, 51 million pounds would be owed to the exchequer, but instead it received 1.2m pounds, 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 pounds worth of UK sales to its foreign subsidiaries in order to avoid paying any corporation tax.