FTSE 100 corporation tax contribution down £2bn
Overall tax contribution from large companies rises despite fall in profits, survey by influential group of FDs finds
THE CORPORATION TAX CONTRIBUTION from the FTSE 100 fell to £6bn from £8bn last year, despite the overall tax input from the group rising, a survey by PwC and the Hundred Group of finance directors has revealed.
The results come despite profits from the companies dropping during 2013, with total tax contributed up from £77.1bn to £77.6bn. The increase is predominantly due to higher employment taxes, VAT and excise duties.
The fall in corporation tax yield is falls in line with successive government cuts to the rate, alongside the fall in profits, on which it is levied. For every pound of corporation tax paid, the UK’s big firms now pay £2.86 in other taxes.
For the first time, employers’ National Insurance contributions now make up the largest chunk of businesses’ tax costs at 27.5%. As Hundred Group companies employed more people – a 1.3% increase on 2012 – in the UK and increased their wages to an average of over £31,000, their employment tax costs rose, as did the employment taxes they collect. Business rates and bank levy rates have, again, increased year-on-year.
CBI chief policy director Katja Hall (pictured) said: “Despite the public perception and media debate on business and taxation, the vast majority of businesses pays, and wants to pay, the right amount of tax.
“This survey shows that the tax contribution of the FTSE100 has remained constant, contributing 14% of government receipts, despite a cut in corporation tax.
“It is also interesting to see that the profile of tax contribution is shifting from corporation tax to employer’s National Insurance Contribution, as businesses employ more people and increase wages.”
