Thread: UK taxman takes 45 percent of companies' profits

Sound Familiar... if not, you better get used to it; Obama will have to tax everyone blind so he can pay off the special interest groups

UK taxman takes 45pc of companies' profits

Britain's top finance directors have warned that the increasing tax burden on large companies will seriously harm investment in the UK, after 45pc of their profits went to the Government last year.

By Rowena Mason
Last Updated: 7:26PM GMT 25 Feb 2009

A report from the Hundred Group, the body that represents the finance directors of the UK's top 120 to 150 companies, showed that their tax contributions rose from 34pc to 45pc of profits last year.

The survey, carried out by accountancy firm PricewaterhouseCooper, revealed that these companies paid almost a quarter of the Government's total corporation tax income, in the year to 31 March 2008.

Ashley Almanza, finance director of BG and Hundred Group chairman, warned that for every £1 paid in corporation tax, an extra £1.14 is now paid in other taxes, squeezing businesses to the limit as the financial crisis takes hold.

"What we're saying is any more changes in the tax burden that drive costs higher will put our companies at a disadvantage in the economy and make the UK a less attractive investment prospect," he said. "We're looking for assurances from the Government."

Mr Almanza emphasised that corporation tax was not responsible for the proportion of profits paid to the state. This has happened because non-corporation tax contributions, such as National Insurance, did not decline in line with falling profits.

Total tax paid to the Inland Revenue by the group fell for the first time since the survey began four years ago, declining 12pc to £23bn, since last year's profits were hit by the consumer slowdown and financial turmoil.

The Government's income from corporation tax fell 24pc in line with slumping pre-tax profits and stamp duties fell 15.5pc as house sales dropped, but National Insurance contributions rose 10pc over the year.

"Our member companies will be looking at the rate of total taxes as a percentage of profits with some deep concern," he said. "They will be looking at ways to offset those large tax burdens."

Prime Minister Gordon Brown reduced the main rate of corporation tax from 30pc to 28pc from last year, easing the burden on big companies.

However, next year's survey is likely to show that the tax burden on large companies has only increased, since this year's report covers company tax payments between the first quarter of 2007 and 2008, before the full force of the financial crisis.

Figures for next year are likely to be more severe both in terms of declining income for the government and an increasing proportion of tax taken from company profits.

"The general effect of the recession will have an effect on total tax collection across all the sectors, not just the banking industry," said Susan Symons, tax partner at PricewaterhouseCooper.

The survey's estimates were based on the answers of 83 of the Hundred Group's members.

http://www.telegraph.co.uk/finance/econ ... ofits.html

Have a feeling they won't be happy till you have to work so many hours in exchange for a loaf of bread. Another so many hours for your housing, etc. This is getting frightening.

If the companies didnt fire all the locals and import their labor, there wouldnt be such a burden on them for taxes for social support programs.

They brought the high taxes on themselves.