UK Corporate Income Tax Down, But Tax Payments Up
January 31, 2014 Taxation in UK
LONDON – Large businesses in the UK have indeed been paying less taxes in recent years, however, their overall contribution to the budget and society has been growing significantly.
On January 30th PricewaterhouseCoopers released its latest annual Total Tax Contribution report, showing that while there has been reduction in the income tax obligations of the UK’s biggest businesses in recent years, the total amount of taxes, duties and levies being paid out has steadily increased each year.
According to the report, during the last calendar year the companies UK FTSE 100 made cumulative tax payments of approximately GBP 78 billion, accounting for 14.1 percent of all taxes collected in the country in 2013, and, statistically, such an amount of revenue is the highest on record since 2005.
It was also shown that over the last 9 years income tax rates have gradually gone down in the UK, but at the sam time the burden of all other applicable taxes, levies and fees has risen, the have has undergone a relative drop become a relatively smaller burden on businesses compared to other applicable taxes, and if in 2005 the proportion of income tax paid compared to other taxes was GBP 1 to GBP 1, the ratio has now shifted to GBP 1 of income tax against GBP 2.86 of other business taxes.
The authors of the report also noted that aside from their direct contribution to the national budget, the companies of the FTSE 100 aare also putting in approximately 21.4 percent of all capital investment in the UK, backing more than 31.1 percent of all research and development activity in the country, while employing 7.2 percent of the national workforce, and raising employment levels and salaries by 1.3 and 2.5 percent in last year alone.
Summarizing the overall finding of the report, PricewaterhouseCoopers claimed that “…whilst media and political attention continues to be heavily focused on corporation tax, companies bear and collect a much wider range of taxes…These are becoming increasingly important as a result of policies implemented by successive governments, and their public profile is increasing.”
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