The total tax rate for the UK’s biggest companies was at a 10-year high before Covid-19 struck, according to PwC.
In the accounting firm’s ‘Total Tax Contribution of the 100 Group’ report, the UK’s biggest companies generated £84.1bn in tax during the 2019/20 financial year which, on the most part, preceded the pandemic.
The total amount generated represents just over 11% of all government tax receipts and a significant drop in the tax contribution is expected in 2021, as declining profitability leads to lower corporation tax payments.
Marissa Thomas, head of tax at PwC, said: “This survey underlines the contribution of the largest UK companies to the economy and wider society. It’s clear that there are significant challenges to be overcome in the years ahead.
“Moving to a zero-carbon economy and reskilling in the age of increasing automation were already pressing priorities which now have to be accelerated against the backdrop of the recovery from the crisis.”
She added: “With the imminent end of the EU transition agreement, now is the time for a fresh assessment of how we create a tax system that addresses those priorities while encouraging investment and providing certainty for the future.’
