FTSE 100 companies’ taxes rising since 2005, says PwC
Business secretary Vince Cable calls tax avoidance debate “toxic”
By Gaurav Sharma | CFO UK | Published 12:04, 23 January 13
In the midst of an on-going debate about UK tax avoidance by multinationals, the country’s biggest listed companies have seen their tax bill rise by 19 percent since 2005, a PwC report has said.
The global advisory firm’s survey of FTSE 100 finance directors and CFOs, published this week, showed that despite a 17 percent fall in corporation tax between 2005 and 2012, other taxes had risen by 58 percent.
PwC’s Hundred Group said that FTSE 100 companies paid a total of £77.1 billion in tax in 2012; 14.2 percent of total UK tax receipts. In 2012, for every £1 of corporation tax paid, the FTSE 100 participants paid another £2 in other business taxes, the report added.
However, the economic slowdown and a reduction in the headline rate of corporation tax have resulted in a 17 percent drop in corporation tax payments since 2005. In his autumn statement, Chancellor of the Exchequer George Osborne said he wanted to make the UK the most competitive tax system in the G20.
Concurrently, lower takings from corporate tax and subsequent revelations about UK tax avoidance measures by multinationals such as Starbucks, Google and Amazon have courted controversy. The UK’s parliamentary Public Accounts Committee (PAC) has since called on the HMRC to be more aggressive in dealing with tax avoidance.
At a hearing in November, Google, Amazon and Starbucks denied illegality but were accused of immorality by PAC chair Margaret Hodge. As the UK assumes the rotating presidency of G8 group of nations, Prime Minister David Cameron, who will chair a June summit, has placed tax compliance and transparency at the heart of the agenda.
But London Mayor Boris Johnson has warned against excessive “bashing and sneering” at multinationals that employ thousands in the UK. On Tuesday, business secretary Vince Cable also waded into the discussion by describing the conversation as “toxic” in the current economic climate but called for “tax integrity.”
Speaking at an Economist Group event in London, Cable said, “This issue evokes fierce emotions and is pretty toxic. We cannot pretend otherwise. My take is that we need a bit of basic tax integrity and collective measures within G8.”
Meanwhile, the PAC has said that it will now examine the role of the big four accounting firms in helping firms reduce their tax exposure.
Share:Facebook Twitter Google Plus Stumble Upon Reddit Share This Email this article
The role of the CFO and the board in strategic risk governancemore ..
Marks and Spencer releases Alan Stewart early by to help deal with £250 million hole in Tesco’s accountsmore ..
The company is being sued by Getty Images for copyright infringementmore ..
Apple failed to show that it suffered enough harm as a result of Samsung's infringementmore ..
Examining how CFOs can improve the way they report back to the boardmore ..
Litigation funding is a very useful tool for CFOs but not a panacea for all legal mattersmore ..