Total Tax Contribution 2010 - Key findings
UK's largest companies continue to make substantial economic contribution to UK public finances
A survey* of The Hundred Group shows that Britain's largest companies make a big contribution to the UK economy. They employed 1.8m UK employees and had a Total Tax Contribution of £56.8bn, which is 11.9% of government receipts from all taxes for the whole of the UK.
Corporation tax is still the largest tax borne by survey participants, but the survey results show how volatile this tax is and that it now accounts for just 33.7% of total taxes borne, the lowest percentage since these surveys began in 2005.
Total taxes borne have fallen 25.1% in the 2010 survey compared to last year, primarily reflecting a drop in corporation tax and petroleum revenue tax from falling commodity prices and lower profitability. Irrecoverable VAT also fell due to the Government’s temporary VAT rate reduction to 15%.
Taxes that Hundred Group members collect on behalf of Government were more stable falling only 1.9%. Lower amounts of tax deducted from interest, due to lower interest rates, were offset by higher excise duties collected.
For every £1 of corporation tax paid, there is another £1.97 paid in other taxes borne and £6.79 in taxes collected.
A major UK employer and employment tax payer
The Hundred Group companies employed 6.1% of the entire UK workforce and generated total employment taxes of £16.7bn.
Despite the downturn, their employee numbers have fallen only 1.1% in the last year, with job losses in the financial services sector being offset by increases in other sectors.
Hundred Group companies employ skilled, well-paid workers. On average, employment taxes per employee of £19,392 were paid into the public finances in 2010. This is a measure of the taxes directly generated through jobs created by these large employers.
Four industries create two thirds of the Hundred Group’s Total Tax Contribution
As in previous years, four industry sectors made a major tax contribution Together, the participating oil and gas companies, retailers, banks and insurance companies paid two thirds of the taxes borne and collected, but they represented just under a third of the number of companies taking part in the survey.
Corporation tax and petroleum revenue tax payments for oil and gas companies fell as the oil price fell and North Sea production levels declined. Due to very low interest rates, the tax deducted at source by banks from payments of interest to their customers also fell.
Companies use their Total Tax Contribution to help transparency
Hundred Group companies that take part in these surveys use their own Total Tax Contribution data in many different ways. Over half the companies use it in internal communications to highlight the importance of other taxes as well as corporation tax, and to brief their Board.
Over a third use it in discussions with HM Revenue & Customs (HMRC). Around an eighth use it in media releases or external relations to show their positive economic contribution, or include it in their corporate reporting - either financial statements or corporate responsibility/sustainability reports.
* 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.
