By Janet Kerr, senior manager in the Total Tax Contribution team
The contribution of the UK financial services sector to the public finances
£65bn. That’s the estimated amount paid by the UK financial services sector (banks, insurance companies, and other financial companies) into the public finances in the year to March 2013. The total is made up of twenty different taxes borne and collected by these companies. Corporation tax, the tax that is often front of mind when thinking about the contribution of large corporates is £6.5bn, 10% of the total.
These are some of the findings in a report released today by the City of London on the Total Tax Contribution of the UK financial services sector.
The largest taxes borne and collected by the sector are employment taxes (income tax and national insurance). For anyone with children reaching the end of formal education, you’ll know, like me, that the job market in the current environment is tough. This sector employs 1.1 million people and estimated employment taxes are £28.4bn, that’s 12% of Government receipts from employment tax in the UK.
Corporation tax borne, which is often the subject of media debate and public scrutiny, is the third largest tax borne on average for the study participants, after employers national insurance and value added tax which is a cost to the business.
The study findings highlight the importance of looking at the Total Tax Contribution to understand the contribution in taxes borne and collected of the UK financial services sector.
Janet Kerr, is a senior manager in the Total Tax Contribution team and co-author of the study report.
The full research report can be downloaded from the City of London Website.