LONDON Dec 19 Financial services firms paid 63
billion pounds ($102 billion) tax in Britain in the 2011/12
financial year, according to a report, with a bank levy and
higher personal income taxes making up for a fall in corporate
The tax take for the year to March 2012 was in line with
2010/11, the report by accountancy firm PricewaterhouseCoopers
"What has happened as profits have dipped and the
government's policy has flowed through in terms of cutting
corporation tax but raising other taxes, is that the balance of
tax has changed but the overall amount of tax has remained
roughly the same," PwC tax partner Alex Henderson told Reuters.
Financial services have long been a crucial key source of
tax revenue for Britain, where the industry makes up about 10
percent of the economy.
A slowdown in activity this year, as the euro zone crisis
bit, has hit earnings and sparked job cuts, raising fears that a
shrunken sector would hurt national finances at a time of big
Europe's finance sector has been the target of tougher
regulations, including on pay, since the 2008 financial crisis
that caused many banks to be bailed out with state aid,
including several in Britain.
The bank levy, introduced as an annual charge by the British
government in 2011, raised 1.6 billion pounds from the first
three quarterly payments in 2011/12, according to PwC.
The Treasury said earlier this month the levy would raise
1.8 billion pounds in 2011/12. The levy is set to increase in
January, with the Treasury estimating the tax will raise 2.8
billion pounds in 2013/14.
Corporation tax paid by City firms, meanwhile, fell a
quarter to 5.4 billion pounds, the report found.
The government is under pressure to crack down on big
companies operating in Britain after investigations into the tax
practices of international groups such as coffee chain Starbucks
VAT sales tax and national insurance contributions also
helped swell government coffers. They are now the two heaviest
burdens on the finance sector, accounting for almost 60 percent
of the taxes borne, according to figures extrapolated from data
supplied by 39 financial services.
The 63 billion pounds tax paid in 2011/12 represented 11.6
percent of the government's total tax intake, down from 12.1
percent the year before.
"The sector remains a major contributor to the UK's total
tax take despite the Eurozone crisis and regulatory reforms
impacting on the profitability of the banks, in particular,"
said Mark Boleat of the City of London Corporation - the local
authority covering much of London's main business district,
which commissioned the survey.