UK Financial Services Pays £63bn in Tax

The UK’s financial services sector contributed £63bn in taxes last year according to research by PwC, a rise of 18% compared to the year before.

PwC’s report for the City of London Corporation says the finance industry accounted for 12.1% of the total UK tax take

This total is up by £9.6bn from the previous fiscal year due to increased levels of corporation tax, VAT and employment tax both borne and collected.

The one-off bank payroll tax, charged on 2009 bonuses, was paid in this year totalling £3.4bn, but the study does not include the new bank levy paid for the first time in 2011 or the full impact of the 20% VAT rate.

Stuart Fraser, policy chairman at the City of London Corporation, said: ‘At a time when the City’s value is being questioned, both in the UK and in Europe, these figures highlight the huge fiscal contribution it continues to make even in this extremely challenging economic environment.

‘That is why we must be wary of crossing a tipping point when it comes to taxation. The European Commission’s own impact assessment highlighted that between 70% and 90% of all derivatives trading could move outside of Europe if a financial transaction tax was implemented.’