The results of the 2008 Total Tax Survey (which was published by PricewaterhouseCoopers – PwC) have been released and show some very interesting figures.
The report covered all tax receipts from UK organisations up to 31st March 2008 and it turns out that one quarter of all corporate tax paid (approximately £11 billion) in this period was by some of the largest operating companies.
Chairman of the Hundred Group of Finance Directors Ashley Almanza commented on the report findings.
"The 2008 Total Tax Survey once again shows the extent to which our largest companies support UK public finances through the payment and the collection of taxes on behalf of the government."
'In this economic climate the tax burden on large companies needs to be well understood. Taxation levels have an important impact on our ability to compete in a fiercely competitive global economy.
'The ideal is to encourage economic activity and thereby grow overall tax revenues.'There were other important findings in the report which consisted of the following:
- £42.6 billion in taxes was collected by the Hundred Group on the government’s behalf along with a further £12.9 billion in other taxes (such as National Insurance). A total of £66.5 billion was paid to the government in the tax year up until 31st March 2008
- Contributions for National Insurance totalled 20%, local business rates 14% and corporation tax 47%
- 41% of taxes collected were relating to the purchase of tobacco, alcohol and fuel products
- The average level of taxes paid and ultimately collected (per individual worker) amounted to £19,729 last year
Tax partner at PricewaterhouseCoopers Susan Symons also commented on the published results. "This data is valuable evidence in the debate on how to improve the competitiveness of the tax system."
"The drop in corporation tax paid by participants in this year’s survey highlights the sensitivity of corporation tax to competition and economic change. Next year's survey findings are likely to show the impact of the global economic downturn, with profits expected to drop in a number of sectors. Rising unemployment levels are also likely to lead to a drop in employment taxes and the level of stamp duties will fall as transaction volumes slow."
As with the UK, some US companies assist the state with necessary tax collection from corporate firms. Principal of the National Economics & Statistics at PricewaterhouseCoopers’ Washington National Tax Services facility, Peter Merrill said: “Although they are most visible, corporate income taxes are just one of a plethora of taxes borne by US companies. Beyond income taxes, businesses are liable for a host of other domestic levies imposed by federal, state and local governments, as well as substantial costs to comply with these tax obligations.”
Most small and medium sized businesses are not aware of the facts but as the figures show, larger organisations within the UK pay a large slice of the total paid to the British government and one can say we are reliant on such sums being received on an annual basis.
1st Contact Tax offers Specialist tax services to contracting professionals these services include: Contractor Accounting, Personal Tax for Contractors, Limited Companies for Contractors and Contractor Financial Advice.