U.K. Financial Sector Paid $91 Billion in Annual Tax, Study SaysBy
Industry contributed 11.5% of total government receipts
Report comes amid lobbying for tax cuts after Brexit vote
Financial companies in the U.K. paid 71.4 billion pounds ($91 billion) in tax in the latest fiscal year, 7.4 percent more than a year earlier, driven by an increase in the levy on banks’ balance sheets, a report from the City of London Corp. showed.
Banks and insurance firms contributed the lion’s share within the sector, which overall accounted for 11.5 percent of government receipts for the period through March 2016, according to the body that governs and lobbies for the financial district.
The City of London has emphasized its contribution to the Treasury in post-Brexit lobbying to bolster the demands of financial companies for tax breaks and a special deal allowing them to continue to sell services in the European Union, known as passporting. While such measures could help persuade international companies to keep some operations in London, it could be politically unpalatable after banks were bailed out amid the financial crisis.
“As the last set of data on financial services’ tax contribution before the Brexit negotiations begin, it is hugely important,” Mark Boleat, policy chairman at the City of London, said in the statement. “The sector arguably stands most to lose as negotiations loom. It makes it clear the argument that government should be engaging with firms as it approaches talks with the remaining EU 27, and the pulling of the political trigger.”
The industry paid 8.4 billion pounds in corporation tax, up from 7.6 billion pounds, said the report produced by PricewaterhouseCoopers LLP for the City of London and based on data from 50 companies.
Banks paid 34.2 billion pounds in total tax, including 3.4 billion pounds from the bank levy, the report said. The levy was introduced in 2010 in response to public anger over taxpayer-funded bailouts and was subsequently increased eight times.