City: we pay billions in tax
LEADING industry figures yesterday said the government should underestimate the banking industry’s substantial contribution to its annual tax take at its peril.
They added that the UK’s revenues could be significantly damaged by an exodus of banks from the UK if sweeping new tax hikes are introduced.
“I understand the emotion and why people are angry, but the recovery of the banking system is far more important than implementing crash-and-burn policies in place of adopting a logical approach,” said Angela Knight, chief executive of the British Bankers’ Association.
“The banks already contribute billions to the economy, and the government should explain carefully and clearly to the UK population why it is imperative that we have big taxpaying companies that employ a lot of people here in the UK.”
Financial services firms, excluding life assurers, contributed £6.9bn to the government’s coffers last year in corporation tax receipts alone, around 21.3 per cent of the total figure for non-oil companies of £32.4bn.
The industry’s contribution fell only slightly as a proportion of net corporation tax receipts from the 2007/08 tax year, in which it stumped up 25.6 per cent of the total, equivalent to £10.3bn of revenue.
And before the financial meltdown, in the 2006/7 fiscal year, the sector contributed 28.5 per cent of corporation tax revenues out of a total pot of £37.5bn.
The banking industry also contributes billions to the government’s books in the form of income tax payments. The taxman took around £16bn a year from bankers before the onset of the crisis.
HOW BANKS’ CORPORATION TAX IS FILLING THE GOVERNMENT’S COFFERS
2006/07 2007/08 2008/09
Financials (excluding life assurance) £10.7bn 10.3bn £6.9bn
Total corporation tax revenue (excluding oil) £37.5bn £40.3bn £32.4bn
Financials as a percentage of total 28.5% 25.6% 21.3%