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PwC highlights tax contribution of UK's biggest firms

Dec 13
 
Tags: PwC
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PwC highlights tax contribution of UK's biggest...

PwC has highlighted the growing tax contribution of the UK's largest companies, despite slowing economic growth.

The firm released a report showing that the total tax contribution of the 100 Group - a coalition of member companies representing approximately 90 per cent of the market capitalisation of the FTSE 100 and other large private firms - surpassed £84 billion in 2017-18.

Increasing corporation tax payments by these organisations have driven a £1.9 billion increase in taxes borne - those taken as a direct cost to the business - to £27.2 billion.

In terms of the broader economic contribution of 100 Group members, the PwC study revealed that these companies employ approximately two million people in the UK, each of whom contributes an average of £12,855 a year in tax.

The biggest beneficiary of the value distributed by these firms is the government, which receives 45 per cent in taxes. Employees get a further 30 per cent in the form of wages, while the remaining 25 per cent goes to providers of capital.

Furthermore, the average business participating in the study also supports more than 5,000 UK suppliers, underlining the critical role they play in the UK's economic infrastructure.

Chris O'Shea, chair of the 100 Group tax committee, pointed out that Britain is going through a time of rapid change in business, politics and the economy as a whole. Despite this, the biggest companies have continued to make a major contribution to the economy and local communities all over the country.

"In the past year, we contributed over £84 billion in tax to the UK government and we are directly responsible for over two million jobs and many more indirectly," he added.

"Our continued focus on and investment in research and development, totalling some £10.3 billion in the past year, will ensure the UK remains competitive and at the forefront of innovation."

Kevin Nicholson, UK head of tax at PwC, said it's important for tax policy to evolve to protect public finances, just as businesses are responding to the rapid change occurring around them.

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Image: iStock/daizuoxin

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