The recession has cut the tax contributions of Britain’s 100 largest private and listed companies and their employees by nearly 8 per cent, the study found.
According to PwC, businesses and their workers generated £77.1 billion in tax returns in the 12 months to the end of March, down from £84.1 billion in the previous financial year.
This includes £24.7 billion in taxes directly borne by businesses, such as corporate taxes, and another £52.4 billion in revenues, such as income taxes and insurance contributions. employee’s country.
The study for the Group of 100 Major Employers offers a snapshot of the damage Covid 19 has caused to companies and the direct impacts on HM Revenue & Customs. Team members employ 1.9 million people in the UK, or 5.9% of the national workforce.
The PwC report shows that Covid-19 has had an uneven impact across sectors. While some industries have experienced explosive demand, such as supermarkets and pharmaceutical companies, others, such as transportation and hospitality businesses, have struggled. The £77.1 billion contribution from large businesses and their employees equates to 11.4% of total government tax revenue, a small increase on the previous year.
Without substantial government support, including plans to raise taxes, reduce business tax rates and defer VAT, the damage to the economy would be far greater than in the past, the study said. .
While the taxes borne by the Group 100 fell, profits fell at a greater rate. As a result, the total tax rate – tax as a percentage of commercial profits – has increased for the third year in a row, reaching 54%.
Andrew Packman, tax partner at PwC, says that tax receipts from large companies have demonstrated “significant resilience. . . This highlights both the success of the government’s business support scheme and the stability that the UK’s biggest companies bring to the wider economy and society”.
The amount of tax collected fell 7.8% last year. Corporate tax accounts for the largest proportion of the total tax payable by 100 companies of the Group. Taxes on declared profits, including 27% of all taxes directly paid by 100 Group members. Employers’ national insurance contributions are the second largest taxable, at 26.6%, with the third irrevocable VAT at 14.5%.
The employment tax generates 31.1% of the tax collected, of which the withholding income tax under PAYE accounts for 23.4% and the employee’s national insurance contribution accounts for 7.7%. The second largest share of tax revenue is fuel tax at 25.7%, down from 30.3% last year.