The biggest company in UK hit £85bn in taxes

... Credit :
...
Shadrach   in Alternatives

Last updated: 08 January 2020, 04:42 GMT


 

The annual Total Tax Contribution (TTC) report will be shown that the overall figure rose slightly in the 12 months to the end of March despite sluggish economic growth and a modest fall in collective profitability.

The new data, gathered on behalf of the 100 Group of finance directors of Britain's largest publicly quoted businesses, will reveal a modest fall - from £27.2bn last year to £26bn - in the volume of taxes, such as business rates and corporation tax, paid directly by the companies themselves.

The balance is in the form of taxes collected by the companies

The TTC figure of £84.7bn, which compares to £84.1bn in 2017-18, is only marginally lower than Britain's entire annual education budget of £91bn.

It is the ninth consecutive year in which the overall number has risen

Promoted Recommendations

Senior business figures said this weekend that the survey, which is in its 15th year and is undertaken by the accountancy firm PricewaterhouseCoopers, would be even more closely scrutinised than usual because of its timing.

Next month's general election is being fought against a backdrop of large public spending promises, with the NHS, schools, law and order and the transition to a lower-carbon economy among the central battlegrounds

Business leaders have been at pains to emphasise that the tax contribution of large companies is partly dependent on a stable and dependable tax regime.

"The companies covered by the TTC survey are mobile and have flexibility about where they invest - politicians of all colours need to remember that," said one board member of a FTSE 100 company.

Last week, Boris Johnson, the prime minister, told delegates at the CBI annual conference that a planned cut in corporation tax would be scrapped in order to save about £6bn for spending on the NHS "and other priorities".

If the reduction had been implemented, it would have brought corporation tax - which is levied on companies' profits - down to 17% in the next financial year.

In its general election manifesto, Labour has promised to go much further, warning businesses that it would increase the corporation tax rate to 26%, a level last seen eight years ago.

Labour's plans have attracted protests from employers, with the CBI saying: "Significant hikes in corporation tax, threats to important investment incentives and windfall taxes on oil and gas will set alarm bells ringing for globally mobile businesses."

The latest TTC survey, which will be published this week, is expected to highlight the fact that taxes paid by the biggest companies in the UK last year were equivalent to more than 40% of their commercial profits.

Promoted Recommendations

One insider said that proportion reflected an ongoing shift in tax policy from taxes on profits to those on employment and property, which have risen even as overall corporate profits have decreased.

Among the companies covered by the survey are Barclays, BT Group, National Grid, the miner Rio Tinto and Tesco.

Some of the businesses which contribute to the large sums collected in corporate taxes are at risk of being partly or wholly nationalised by a Labour government, while others have warned about the risks of a hard Brexit - a scenario viewed as most likely under a Tory administration.

One source said that the latest TTC survey would underline the fact that 100 Group firms generated almost 12% of total UK government tax receipts in 2018-19.

It will also show that for every one pound paid in corporation tax by the companies, more than £3 was contributed directly in other taxes borne.

Capital investment during the year increased nearly 10% to £26.8bn, it is expected to reveal, while research and development spending

Approximately two million people are employed in the UK by the 100 Group's members.

 

The 100 Group could not be reached for comment on Sunday.