Big business has hit back at claims that it is not paying its fair share by revealing that the sector contributed £80.5 billion in taxes this year.
The total tax contribution of the 100 Group, which represents FTSE 100 as well as leading private and multinational companies, edged up from £80 billion last year, despite falling profits among retailers and oil producers.
Tax revenues from big business held steady despite the cut in corporation tax because business rates and “irrecoverable VAT”, which cannot be passed on to customers, increased.
Higher pay and more jobs added to the national insurance bill, as well.
“It’s said that companies aren’t paying their fair share,” Simon Dingemans, the finance director of GSK, the pharmaceuticals group, and chairman of the 100 Group, said.
“It’s the opposite. We are paying our fair share while making a significant contribution to the economy.
“Britain’s biggest companies contributed a total of £80 billion in taxes, £30 billion in capital investment and £9 billion in research and development last year, and provided jobs for 2.1 million people.”
The government has been switching the focus of business taxes from profits to property and jobs. Corporation tax has been cut from 28 per cent to 20 per cent and is being lowered to 18 per cent.
It is now the third-largest tax borne by big companies after business rates and employer national insurance contributions, PwC, the accountancy firm, said.
To calculate their total tax contribution, the 100 Group and PwC included the income tax and national insurance paid by staff on their salaries, which totalled £57.6 billion.
The taxes borne as a direct cost to companies fell by 1.8 per cent to £22.9 billion this year because of the reduced rate of corporation tax and lower profits.
The 100 Group claimed that the £80.5 billion figure was more representative of its economic contribution to Britain.
The group claimed that the government’s policy of lowering corporation tax to attract business was working because both investment and employment have increased, which has maintained the overall tax contribution from business.