Britain’s largest companies paid £5.9 billion in corporation tax, 16.7% of all corporation tax receipts in the year to 31 March 2010, according to a survey conducted by PwC’s Total Tax Contribution team for the Hundred Group of finance directors. But critics have described the total tax concept as ‘nonsense’, and a leading tax expert has warned that reporting tax collected from others is not ‘productive’.
A day after David Gauke, the Exchequer Secretary to the Treasury, welcomed PwC’s work and suggested that large businesses should consider engaging ‘more forthrightly’ in the tax avoidance debate to address ‘myths and confusion’, PwC and the Hundred Group declared in a joint statement that ‘in a challenging environment, the Hundred Group continues to make substantial tax contribution (£56.8 billion) to the UK public finances and employment’.
The Tax Justice Network claimed that the Total Tax Contribution fell into the category of ‘spin and whitewash’, adding that ‘it is sad that a UK government minister chooses to endorse such nonsense’.
Bill Dodwell, Head of Tax Policy at Deloitte, has said that companies pay ‘about one third’ of the total tax in the UK and need to help get that message across. ‘However, recording tax collected from others isn't a productive figure to report; it sometimes attracts negative publicity, when campaigners accuse companies of hiding behind their important tax collector role,’ he wrote in Tax Journal (20 December 2010).
In addition to corporation tax, other taxes borne by companies – including employers’ national insurance contributions and business rates – amounted to £11.6 billion, PwC said.
The balance of the ‘total tax contribution’, £39.3 billion, is represented by ‘taxes collected’. PwC acknowledged that apart from the cost of collection, these do not represent ‘a real cost to the company’.
They include income tax and employees’ NICs deducted under PAYE, fuel excise duty and VAT.
The survey was conducted in 2010 and respondents comprised 84 out of the 105 corporate members of the Hundred Group, PwC said. The ‘total tax contribution’ represents ‘12% of all government tax receipts’.
‘Taxes borne are the company’s immediate cost and will impact their results, such as business rates, corporation tax, employers' NICs and irrecoverable VAT,’ the firm added.
‘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.’
Britain’s largest companies paid £5.9 billion in corporation tax, 16.7% of all corporation tax receipts in the year to 31 March 2010, according to a survey conducted by PwC’s Total Tax Contribution team for the Hundred Group of finance directors. But critics have described the total tax concept as ‘nonsense’, and a leading tax expert has warned that reporting tax collected from others is not ‘productive’.
A day after David Gauke, the Exchequer Secretary to the Treasury, welcomed PwC’s work and suggested that large businesses should consider engaging ‘more forthrightly’ in the tax avoidance debate to address ‘myths and confusion’, PwC and the Hundred Group declared in a joint statement that ‘in a challenging environment, the Hundred Group continues to make substantial tax contribution (£56.8 billion) to the UK public finances and employment’.
The Tax Justice Network claimed that the Total Tax Contribution fell into the category of ‘spin and whitewash’, adding that ‘it is sad that a UK government minister chooses to endorse such nonsense’.
Bill Dodwell, Head of Tax Policy at Deloitte, has said that companies pay ‘about one third’ of the total tax in the UK and need to help get that message across. ‘However, recording tax collected from others isn't a productive figure to report; it sometimes attracts negative publicity, when campaigners accuse companies of hiding behind their important tax collector role,’ he wrote in Tax Journal (20 December 2010).
In addition to corporation tax, other taxes borne by companies – including employers’ national insurance contributions and business rates – amounted to £11.6 billion, PwC said.
The balance of the ‘total tax contribution’, £39.3 billion, is represented by ‘taxes collected’. PwC acknowledged that apart from the cost of collection, these do not represent ‘a real cost to the company’.
They include income tax and employees’ NICs deducted under PAYE, fuel excise duty and VAT.
The survey was conducted in 2010 and respondents comprised 84 out of the 105 corporate members of the Hundred Group, PwC said. The ‘total tax contribution’ represents ‘12% of all government tax receipts’.
‘Taxes borne are the company’s immediate cost and will impact their results, such as business rates, corporation tax, employers' NICs and irrecoverable VAT,’ the firm added.
‘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.’
