Britain's biggest companies last year generated their largest collective tax receipt in three years, as a combination of rising profits and hikes in VAT and income tax fuelled saw a 14 per cent jump in contributions.
The so-called Hundred Group of UK companies, together with their staff and customers, paid the Exchequer a total of £67.7bn in the year to March 2011, according to PwC's annual estimate of their tax contribution, which it has been compiling since 2005. It represents 13 per cent of the Government's total tax receipts and was fuelled by a 60 per cent rise in corporation taxes to just under £10bn.
Oil and gas companies remain the biggest generator of taxes in the Hundred Group – which comprises the FTSE 100 and another 17 companies – with hydrocarbon producers, their staff and customers contributing 28.9 per cent of total tax contribution, or £19.5bn. At the other end of the spectrum, so-called planet taxes – such as landfill tax and air passenger duty – remained the smallest contributor, falling 3.4 per cent to just £900m.
"The impact of these [planet] taxes continues to be small despite the Government's stated position that climate change is one of the most serious threats that the world faces," the PwC report noted, adding: "The recession and the need to repair public finances has taken a priority in recent Budgets."
Overall, the Exchequer benefited from strong growth in tax receipts, as company profits rebounded and the 2.5 percentage point increase in VAT to 17.5 per cent in January 2010 pushed up revenues.