A survey conducted by PwC on behalf of The Hundred Group of Finance Directors shows that Britain's largest companies contributed £56.8 billion (or 11.9% of all government tax receipts) in the year to 31 March 2010.
Survey results show that they continue to bear and collect substantial amounts of both corporation tax and other UK taxes despite falling commodity prices and lower profitability generally as a result of the challenging economic environment.
The Hundred Group members continue to be major employers, providing jobs for over 6% of the UK workforce, and generating total employment taxes of £16.7 billion.
Corporation tax is still the largest tax borne by these companies but the survey results show that for the year to 31 March 2010, for every pound paid in corporation tax, Hundred Group members paid £1.97 in other taxes borne and £6.79 in taxes collected.
Ashley Almanza, vice chairman of the Hundred Group of Finance Directors, representing the UK's largest companies, said: "These results show the substantial contribution that member companies of The Hundred Group continue to make to the UK economy. Over the last three years the world has experienced extraordinary financial and economic upheaval and, as the UK seeks to re-establish strong economic growth, it is vital that the UK Government and business work together to continue to create investment and employment opportunities. It is crucial that the tax system in the UK is predictable and internationally competitive."
Susan Symons, leader of the Total Tax Contribution team at PwC, said: "We have been collecting this data for six years and the continued high participation in the survey clearly demonstrates the value in the results which ensure that the impact of the tax system is properly understood. The figures highlight the significant contribution made by large companies to the public finances in spite of the difficult economic environment.
"And we can expect next year's survey to show these contributions increasing again as corporate profitability returns, oil prices recover, the VAT rate increases work through and new taxes are introduced."
Other findings include:
The findings are from the sixth annual Total Tax Survey, carried out by PwC on behalf of The Hundred Group of Finance Directors. This year's survey had a record number of respondents, with 80% of those approached taking part.
The Hundred Group is a non-political, not-for-profit organisation. It aims to contribute positively to the development of UK and international policy and practice on matters that affect how businesses are run, for example, taxation, financial reporting, corporate governance and capital market regulation. Recently The Hundred Group has been particularly focused on UK taxation, its complexity and its impact on competitiveness. Its membership includes the finance directors of the 100 largest public companies in the UK.
The survey was carried out using the PwC Total Tax Contribution (TTC) methodology. This makes a distinction between taxes borne (paid) and taxes collected on behalf of the Government. Taxes borne are the company's immediate cost and will impact their results, such as business rates, corporation tax, employers' NICs and irrecoverable VAT. Taxes collected are not a real cost to the company apart from the cost of collecting them. Here, the company is collecting taxes on behalf of government from others, for example, income tax under PAYE and NICs from employees, general VAT and excise duties.
The PwC TTC Framework provides a standardised methodology and a common language for companies to measure and communicate the taxes they pay. It provides a measure of what companies pay into public finances and contains data over and above the normal tax disclosures in companies' financial statements.
The survey was conducted in 2010 and respondents comprised 84 out of the 105 corporate members of the Hundred Group. Data was gathered for accounting periods ending in the year to 31 March 2010. It covered 22 business taxes in the UK which are either borne or collected by this group of companies.
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