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Contribution Of UK's 100 Largest Firms Grows

by Jason Gorringe,, London

06 December 2017

The 100 largest UK companies – the so-called 100 Group – contributed GBP83.9bn (USD112.2bn) in tax to the UK economy in 2017 and supported around 6,800 UK suppliers, according to a new report prepared with their input.

According to the report, produced by PwC, taxes borne (those that are a direct cost to the company) increased year-on-year by 6.3 percent to GBP25.3bn, while taxes collected (those where the company acts as a collection agent for the Government) decreased by 1.4 percent to GBP57.6bn.

The rise in taxes borne was largely driven by a 33 percent increase in corporation tax receipts and a 4.4 percent jump in employer's National Insurance contributions, PwC said. The 1.4 percent decrease in taxes collected was attributed to falls in net VAT, tobacco duty, and tax deducted at source. This was partly due to a change in law that means banks are no longer obligated to deduct tax from payments of interest.

The report estimates that the 100 Group directly employed 2.1 million people in the UK in the 2017 financial year, amounting to 6.5 percent of the UK workforce. On average, they contributed employment taxes of more than GBP12,000 per worker and, for every GBP1 of corporation tax paid by the 100 Group, another GBP2.91 was paid in other taxes borne.

Employment taxes remained the largest element of the total tax contribution, accounting for 30.6 percent of the 100 Group's total tax bill, the report said.

Chris O'Shea, Chair of the 100 Group Tax Committee, said: "This report illustrates the important role the 100 Group plays in supporting the UK economy. With 2.1 million employees in the UK, 100 Group companies invested almost GBP100m a day on a combination of capital expenditure and research and development - essential building blocks to strengthen the UK as we move into the fourth industrial revolution."

"At a time when it's important to build public confidence in the tax system, 100 Group members make a substantial economic contribution to the UK, not just in terms of taxes paid to the Exchequer, but also broader economic and employment benefits."

Kevin Nicholson, PwC head of tax, said: "The country's largest companies support many smaller ones and continue to make a sustained contribution that goes beyond the payment of corporation tax. With the corporation tax rate set to fall, it's this wider contribution to other taxes and the broader economy that Government is banking on."

"Clarity and certainty on future tax policy will be crucial - 83 percent of 100 Group heads of tax who responded to our survey prioritized certainty on tax above all else. Ensuring that they are able to continue operating in an environment that allows them to carry on prospering post-Brexit will be paramount."

TAGS: environment | Insurance | tax | value added tax (VAT) | interest | law | accounting | banking | employees | corporation tax | United Kingdom | research and development | Employment | Tax

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