Insurance companies and other big businesses in the UK are paying the price of a surging corporate tax bill in Britain.
Research by PwC, on behalf of the 100 Group, has highlighted a significant increase in the rate of tax paid across the financial services sector, describing the findings as “a timely reminder of the value of the financial services sector to the public purse”. According to the report, the share paid by the financial services industry increased by 8.7 percentage points to 43% of all payments by the 100 Group, which represents several large private companies and directors on the FTSE 100.
At the top of the list, none other than the insurance sector – with the report showing that it contributed the bulk of the 9.2% corporate tax bill increase driven by the strength of the bond markets. Banks, meanwhile, also saw a surge in corporate tax payments – by around two thirds – partly due to compensation payments related to pass misconduct.
The idea behind the survey, of course, is to boost public perceptions of big business by highlighting the role it plays for the economy, a point that Andrew Bonfield, chairman of the 100 Group, was keen to emphasise.
“Britain’s biggest companies contributed a total of £82bn in taxes, £26bn in capital investment and £8bn in research and development last year, and provided jobs for almost 2.1m people,” he told
The Financial Times.
“They also supported the activities and employment of many smaller companies in their supply chains.”
Despite the year-on-year increases, however, the publication reports that corporation tax now only accounts for 20% of the total taxes paid by the 100 Group – that compares to 50% when the survey started more than a decade ago. Businesses still pay in more in terms of rates and national insurance.
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