THE UK’s 100 largest companies accounted for 11.9 per cent of the Treasury’s total tax receipts last year, a survey by PricewaterhouseCoopers has revealed, equal to total payments of £56.8bn.
Two thirds of the taxes collected were paid by just a third of the top 100 companies, with oil and gas producers, banks, insurance firms and retailers making the biggest contributions.
The £56.8bn figure includes all taxes the companies handed over to the state, mostly made up of corporation tax, VAT, national insurance, business rates and income tax paid on behalf of employees.
The survey shows that companies’ total tax rate on earnings, at 51.8 per cent, has remained higher than the pre-crisis norm so that for the second year running, Britain’s biggest firms saw more than half of their profits taken by the taxman.
Corporation tax is still the biggest burden, despite dropping off as profits have suffered since the crisis. Over a third of the tax paid by the companies surveyed was in corporation tax: this is down from 2009 when it accounted for 44 per cent of taxes paid, but still much higher than in all other previous surveys.
And despite the drop in corporation tax receipts, PwC says that the overall tax burden has increased since 2008 because “unlike corporation tax, payments of other taxes borne do not fall with declining profitability and thus become relatively more expensive”.
The research also highlights that the country’s largest 100 companies paid 12.1 per cent of the Treasury’s total VAT?receipts, or £8.5bn, and employ 6.1 per cent of the UK’s workforce, for which they hand over £16.6bn in employment taxes (national insurance and employees’ income tax combined).
The findings coincide with a report released today by the Oxford University Centre for Business Taxation showing that the UK’s biggest one per cent of companies pay 81 per cent of the country’s corporation tax.
The research also reveals that the UK’s relatively low corporation tax is an aid to Treasury revenues: “The UK was able to collect higher revenues on average than other G7 countries despite having a significantly lower tax rate,” it says.