RESEARCH REPORT
Total Tax Contribution of UK Financial Services Eighth Edition KEY FINDINGS Corporation tax
Tax deducted at source
9.9%
K he U in t id Pa
11.2%
Employment taxes
£66.5bn
47.3%
of pr th ax e t y in d rag Ave e stu th
e
Financial services employed 1.1m people, who paid £30bn in employment taxes, representing 11% of the government receipts of PAYE and NIC taxes.
Total taxes from Financial Services 11% of total UK tax receipts
ile f ye rom ar c to omp an 31 Ma ies in rch
VAT
3.6%
6.1% City of London Economic Development PO Box 270, Guildhall, London, EC2P 2EJ www.cityoflondon.gov.uk/researchpublications Twitter.com/@CoLresearch
6.2%
Insurance Premium
Other taxes
15.7%
Irrecoverable VAT payments have increased by 74.8% since 2007
Bank Levy Introduced in 2012, the bank levy counteracts the reduction in corporation tax rate for banks.
Report prepared for the City of London by PwC
in t
RESEARCH REPORT
PUBLISHED DECEMBER 2015
Total Tax Contribution of UK Financial Services Eighth Edition TAXES BORNE
The eighth edition of the Total Tax Contribution of UK Financial Services report has found that the sector remains a significant contributor to the UK’s tax revenues, paying an estimated amount of £66.5bn, which is equivalent to 11% of the total UK Government tax receipts in the year to 31 March 2015. This includes both taxes borne of £26.2bn and
1.5% Other taxes
2007 2015
19.1% Irrecoverable VAT 21.3% PSA & Employers' NIC 10.8% Stamp duties 6.5% Business rates
taxes collected of £40.3bn. The Total Tax Contribution
0.8% Other taxes
25.3% Irrecoverable VAT 6.8% Bank Levy
33.5% PSA & Employers' NIC 5.7% Stamp duties 8.1% Business rates
has increased by 1.4% since 2014 (£65.6bn) and is the highest level since 2007.
40.8% Corporation Tax
19.8% Corporation Tax
collected. Employment taxes – which are determined by The report reviews all taxes paid by the sector.
salary, number of employees and tax rate – are a more
The chart shows the profile of taxes borne and how this
stable source of revenue than corporation tax which is
has changed since 2007, affected by the economic
more volatile. Corporation tax is a reflection of a firm’s
climate and changes in government policy.
profitability, thus its increase highlights the trend of firms paying more tax as they come back into profit.
The increased tax contribution in this latest report is driven by uplifts in the amount generated from
Key findings overleaf >>
corporation tax (up 40.7% to £7.6bn) and the bank levy (up 22.7% to £2.7bn). These two taxes are
Full report available online
relatively small components overall, with employment taxes at £30bn being the largest taxes borne and
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