Big business paying more NIC than corporation tax

A report published by PwC and The 100 Group, Total tax contribution and the wider economic impact, reveals that the overall tax contribution of The 100 Group companies rose in 2013, despite a decline in profits earned in the UK by these businesses, 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 proportion of a company’s tax bill made up of corporation tax continues to decline, in line with successive government policies. For every £1 of corporation tax paid, the UK’s big firms now pay £2.86 in other taxes. For the first time, employers’ NIC now makes up the largest chunk of businesses’ tax costs (at 27.5%).

Kevin Nicholson, head of tax at PwC, said: ‘It’s not a surprise that for the first time corporation tax is not the largest tax paid by the UK’s bigger employers. Looking at the full picture of tax paid by business, you see that tax on profits have fallen, while taxes on labour and property have increased. This is a global trend.’