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Pandemic hits tax take from large companies

Pandemic hits tax take from large companies

Analysis by PwC shows that the economic slump driven by the pandemic reduced the tax contribution of Britain’s largest 100 listed and private companies and their employees by almost 8%. The businesses and their workers generated £77.1bn in tax in the year to the end of March, down from £84.1bn in the previous financial year. The total comprised £24.7bn in taxes on businesses, such as corporation tax, and £52.4bn in worker-related taxes, such as income tax and employee national insurance contributions.

Corporation tax accounted for 27% of all taxes paid directly by the 100 firms, while 26.6% came from employers’ national insurance contributions. In regard to taxation of employees, income tax deducted under PAYE accounted for 23.4%. The overall £77.1bn contribution from the large businesses and their employees equated to 11.4% of all government tax receipts, a small increase on the previous year.

The report said that without government support such as the furlough scheme, business rates relief and VAT deferrals, the economy would have taken a far heavier hit from the pandemic. Andrew Packman of PwC said that tax receipts from large companies had proved “remarkably resilient”, adding that this “underlines both the success of the Government’s business support plan and the stability the largest UK companies offer to the economy and wider society.”

Read more: The Times

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