LONDON Jan 22 The corporation tax bill for
Britain's biggest companies tumbled by 18 percent last year,
despite a rise in profits, PricewaterhouseCoopers (PwC)
said on Tuesday.
The accountancy firm's annual report on tax payments by the
Hundred Group, which represents about 100 of the biggest
UK-listed and headquartered companies, comes amid intense public
anger about tax avoidance.
Revelations about how companies such as Starbucks,
Apple, Google and Amazon use complex
inter-company transactions to cut their tax bills have prompted
UK parliamentarians to mull possible changes in the law.
PwC denied that last year's drop in corporation tax payments
- the British form of corporate income tax - was a result of
avoidance and said that it was partly because of lower tax rates
and fewer one-off payments.
Andrew Bonfield, chairman of the Hundred Group's tax
committee, said that the downward trend in corporation tax
payments, which goes back to 2005, reflected a shift in taxation
away from profits to other forms of tax on business.
"The reason for that is quite a significant switch in the
way that the tax burden is pushed onto corporations, much more
onto taxes on property ... and onto people," said Bonfield, who
is also Chief Financial Officer for utility National Grid.
Some economists believe that taxes on equipment, premises
and staff deter employment. The French government, for example,
is seeking to tackle unemployment by cutting payroll taxes.
Other economists, however, maintain that corporate income
taxes also deter investment and job creation.
Corporation tax payments by the Hundred Group totalled 8
billion pounds ($12.7 billion) in 2012, down from 9.8 billion
pounds in 2011, when figures were boosted by 1 billion pounds of
payments relating to previous years, the survey said.
The UK corporation tax rate fell from 28 percent to 26
percent during the survey period, and the government plans to
cut the rate to 21 percent from 2014.
The results of the PwC survey come a day after the
announcement that British lawmakers are to quiz representatives
of the largest accounting firms - including PwC, Ernst and Young
, KPMG and Deloitte - this month
over their role in helping big companies to minimise tax bills.