The 100 largest UK companies (the 100 Group) contributed £83.9bn in tax to the UK economy in 2017 and supported around 6,800 UK suppliers, a substantial proportion of which are small-to-medium enterprises (SMEs).
That’s according to a PwC report on the 2017 Total Tax Contribution for the 100 Group. This shows that taxes borne - those that are a direct cost to the company – increased year-on-year by 6.3% to £25.3bn, while taxes collected – those where the company acts as a collection agent for the government - decreased by 1.4% to £57.6bn.
The report estimates that the 100 Group directly employed 2.1m peoplein the UK in the 2017 financial year –amounting to 6.5% of the UK workforce. On average, they contributed employment taxes of more than £12,000 per worker and, for every £1 of corporation tax paid by the 100 Group, another £2.91 was paid in other taxes borne.
Employment taxes remained the largest element of the total tax contribution, accounting for 30.6% of the 100 Group’s total tax bill.
The report also shows that the 100 Group companies spent £9.2bn on research and development (R&D), a 7.7% increase on the previous year. Capital investment expenditure was £26.6bn, up 1.7% on 2016.
For the first time, the study calculated gross value -added - a measure of the value of goods and services produced - which was estimated at £66,000 per every 100 Group employee. This compares to an average of £55,000 per employee across the entire UK economy.
Chris O’Shea, Chair of the 100 Group Tax Committee, said:
The rise in taxes borne was largely driven by a 33% increase in corporation tax receipts and a 4.4% jump in employer’s National Insurance contributions.
The 1.4% decrease in taxes collected was attributed tofalls in net VAT, tobacco duty and tax deducted at source, where a change in the law sees banks no longer required to deduct tax from payments of interest.
Kevin Nicholson, PwC head of tax, said:
Notes to editors:
The survey was carried out using the PwC Total Tax Contribution (TTC) methodology. This makes a distinction between taxes borne and taxes collected on behalf of the government. Taxes borne are the company’s immediate cost and will impact their results, such as business rates, corporation tax, employers' NICs and irrecoverable VAT. Taxes collected are those generated and administered by firms such as income tax deducted under PAYE and NICs from employees, general VAT and excise duties.
The PwC TTC Framework provides a standardised methodology and a common language for companies to measure and communicate the taxes they pay. It provides a measure of what companies pay into public finances and contains data over and above the normal tax disclosures in companies’ financial statements.
The survey was conducted in 2017 and respondents comprised 100 companies in the 100 Group. Data was gathered for accounting periods ending in the year to 31 March 2017.
The report uses the data provided by participating companies which is extrapolated to represent the full membership for 2016 and 2017.
About the 100 Group of Finance Directors
The 100 Group represents the views of the finance directors of FTSE 100, several large UK private companies and some UK operations of multinational groups. Our member companies represent the vast majority of the market capitalisation of the FTSE 100, collectively employing over 6.5% of the UK workforce, and in 2017 paid, or generated, taxes equivalent to over 12.6% of total UK Government receipts. Our overall aim is to promote the competitiveness of the UK for UK businesses, particularly in the areas of tax, reporting, pensions, regulation, capital markets and corporate governance.