Major UK companies to contribute more in tax, says report
PwC has found that the UK’s biggest businesses will see their tax hit record levels this year.
PwC has highlighted the contribution of big business to the UK economy with new figures from their latest Total Tax Contribution survey. The survey shows that Britain’s largest companies paid the highest tax revenues ever recorded in 2014: a reminder that big businesses make a significant contribution to the UK economy.
PwC’s 100 Group, comprised of the finance directors of large companies and some multinationals operating in the UK, revealed that they have collectively paid some £80 billion this year. This is a rise of £2 billion from 2013.
Improving economic situation resulted in highest tax figures ever recorded.
Most of the increase was driven by rising employment and pay: over two million people are now employed by these firms, with their average wage rising by 4.3 per cent to £31,900. This boosted the income tax they paid, as well as higher VAT payable on sales.
“This report shows the clear link between helping businesses grow, invest, and employ, and how much money goes into the public purse,” said Andrew Bonfield, chair of the 100 Group tax committee. “Taxes must be looked at in the round: businesses tax costs extend way beyond corporation tax and their wider tax and economic contribution is far greater still.”
Relieving the tax burden on businesses may benefit exchequer
Though less tax was paid per employee, the total contribution from employment taxes rose. At the same time, after disregarding the oil and gas companies who have registered lower receipts this year, corporation tax rose by 6.7 per cent and the rest of the business taxes payable increase by 6.2 per cent.
Kevin Nicholson, PwC’s head of tax, said: “Government policy of reducing corporation tax to make the UK open for business appears to be paying off. But governments need to watch the impact on different industries as other taxes become more significant.”