- Industry contributed 11% of U.K. taxes, City of London says
- Total tax take rises 1.4%; bank levy generated 23% more funds
The U.K. collected 66.5 billion pounds ($99 billion) in taxes from the financial-services industry during fiscal 2015, up 1.4 percent from a year earlier and the highest total since 2007, according to the local government body that oversees Britain’s main financial district.
The industry contributed 11 percent of total U.K. government tax receipts, the City of London Corporation and PricewaterhouseCoopers said in a report published on Friday. Employment taxes generated 30 billion pounds, the biggest share.
Corporate tax revenue rose 41 percent to 7.6 billion pounds, while the bank levy, a post-financial crisis measure based on the size of lenders’ balance sheets, generated 2.7 billion pounds, a 23 percent increase from a year earlier.
“The burden of tax on companies has shifted from profit-based taxes to other business taxes, and this is particularly significant for the financial-services sector,” Andrew Packman, PwC’s tax transparency leader, said in the statement.
U.K. Chancellor of the Exchequer George Osborne said in July he will cut the bank levy over six years and then limit it to domestic balance sheets, following pressure from firms including HSBC Holdings Plc that threatened to leave London. HSBC, which has been generating most of its earnings in Asia, is still assessing whether to move its headquarters, partly because of increasing taxes and some of the strictest bank regulations in the world.
Including all financial-services companies, banks pay the majority of the industry’s taxes, with 45.2 percent of the total from U.K.-based firms and 20.3 percent from foreign institutions, the report said.
“Eight years after the financial crisis, the industry is growing at a strong pace, and is well and truly recovered from the economic shocks brought about by the crash,” Mark Boleat, the City’s policy chairman, said in the statement.