The Total Tax Contribution (TTC) of the 100 Group for 2020/21
The impact of the COVID-19 pandemic on the 100 Group tax contribution
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2021 Total Tax Contribution survey of the 100 Group
The 2021 Total Tax Contribution report presents the tax and economic contribution of the largest listed companies in the UK for 2020/21, showing the impact from the COVID-19 pandemic.
Now in its 17th year, the annual survey collects data from 100 Group members on their UK tax contribution and reports on the contribution made in taxes borne, taxes collected, and the wider economic contribution.
We have analysed trends over the last 12 months and also the last 17 years, highlighting the changing tax profile and how changing economic conditions and legislation have impacted these trends.
Total Tax Contribution
In the context of the COVID-19 pandemic and the largest peacetime economic shock on record, the Total Tax Contribution of the 100 Group fell by 7.8% in 2020/21, but has increased as a share of total government receipts.
- The TTC of the 100 Group was £77.1bn in 2020/21, including:
- £24.7bn in taxes borne
Taxes borne by a company are those that represent a cost to the company and are reflected in its financial results, e.g. corporation tax, employer NIC and business rates, etc. - £52.4bn in taxes collected on behalf of government
Taxes collected are those which are generated by a company’s operations, and are not a tax liability of the company, e.g. income tax deducted under PAYE and net VAT, etc. The company generates the commercial activity that gives rise to the taxes and then collects and administers them on behalf of HMRC.
- £24.7bn in taxes borne
- The 100 Group’s total tax contribution represented 11.4% of total government receipts in 2020/21.
Value Distributed
The value of large businesses extends beyond their shareholders. The 100 Group’s total value distributed includes wages and salaries to employees, taxes borne and collected to the government and profits distributed to shareholders or retained for reinvestment.
Value distributed in 2020/21 included:
- 2.9% profit after tax (shareholders/reinvestment)
- 37.0% wages and salaries net of employment taxes (employees)
- 35.1% taxes collected (government)
- 18.1% taxes borne (government)
- 6.9% net interest (financing)
Total Tax Rate
The average Total Tax Rate - total taxes borne as a proportion of commercial profit - for the 100 Group was 53.9% in 2020/21. This was an increase of 6.0 percentage points and the highest rate since the financial crisis.
Wider Contribution
The contribution large companies make to society extends beyond the value of goods and services produced, and taxes paid:
- Employment: the 100 Group collectively employs around 1.9 million people, 5.9% of the total UK workforce.
- Capital investment: 100 Group capital investment decreased by 21.0% on a like-for-like basis compared to the prior year, as a result of the pandemic. Capital investment by the 100 Group was £18.5bn in 2020/21.
- Research & development: 100 Group R&D expenditure increased by 15.4% on a like-for-like basis compared to the prior year, driven by the pharmaceutical companies in the survey. R&D expenditure by the 100 Group was £9.3bn in 2020/21.
Explore 17 years of the 100 Group’s Total Tax Contribution
Explore the data from our TTC surveys in more detail, comparing the change in profile between different years and different taxes.
The survey collects data from 100 Group members on the contribution made in all taxes borne - the taxes that represent a cost to the company such as corporation tax, employers’ NIC, business rates, irrecoverable VAT and bank levy.
The changing profile of taxes borne between 2005 and 2021
Analysis over the 17 years of the survey shows a significant change in the profile of taxes borne. The contribution made to total taxes borne by taxes other than corporation tax is greater in 2021 when compared with 2005. This changing profile for the 100 Group suggests that tax revenues contributed by this group of companies have become materially less dependent on corporation tax. There has been a consistent trend away from a tax based on profits to taxes based on people, production and property.
Trends in taxes between 2005 and 2021
Over 17 years, the TTC survey has collected an extensive bank of data on tax payments by the 100 Group members. 27 companies have provided data in all the surveys we have undertaken. This enables us to look at the trends in their results on a like for like basis, taking 2005 as 100% for each tax.
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Corporation tax
Over the survey period, corporation tax has been on a downward trend, while the amounts of other business taxes borne have increased. The fall in corporation tax is due to a number of factors: reductions in the statutory rate of corporation tax (from 30% in 2005 to 19% from April 2017), but also, between 2010 to 2015, reduced contributions from the oil and gas sector due to lower oil prices and production levels, from the retailers due to challenging economic conditions, and from the financial services sector, mainly due to brought forward losses.
In 2017 there was an increase in corporation tax for the first time since 2011, following a greater contribution from the financial services sector, largely due to legislative changes affecting the banks and strong performance of investment assets affecting the insurers. Following three consecutive annual increases, corporation tax paid by these 27 companies decreased in 2019 as a result of lower profits and decreased once again in 2021 as a result of the COVID-19 pandemic. Government legislation has had a clear impact on the corporation tax paid by the banks in the survey, with tighter loss relief legislation, non-deductibility of compensation payments, and the introduction of the bank surcharge in January 2017, imposing an additional 8% surcharge on bank profits.
Tighter loss relief legislation applied to other industry sectors from April 2017, with 50% of taxable profits eligible to be offset by carried forward losses. Legislation restricting corporate interest deductions was also introduced from April 2017. In 2021, corporation tax is once again the largest borne by 100 Group companies.
Notes about the survey
- Charts are based on data provided by survey participants in each survey.
- PwC has anonymised and aggregated this data to produce the survey results.
- All 17 TTC surveys with the 100 Group use the same PwC TTC methodology which enables the results to be compared.
- PwC has not verified, validated or audited the data and cannot give any undertakings as to the accuracy of the survey results in that respect.
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