In data just released by HM Revenue & Customs collections from UK Corporation tax have risen by 9.05% in the last 12 months – despite a decrease of 1% in the headline rate of corporation tax to 19% from 1 April 2017. This is an increase of £4,577m says, Blick Rothenberg.
Simon Wagman a partner at the firm said, ‘Despite the fact that headline corporation tax rates have decreased over recent years, the tax collected from corporation tax has continued to increase by some 25% over three years.’
Simon added, ‘Companies House statistics indicate that the number of incorporations in the UK continue to increase, with the total register at Companies House surpassing 4 million companies for the first time in the quarter to 31 March 2018.’
‘The data however also indicates the rate of incorporations has decreased with 2016 reaching the height. This increase in incorporations could in part explain the increase in tax, with the 2016 new incorporations paying corporation tax for the first time in 2017/18.’
Simon said, ‘As often reported, a decrease in absolute tax rates, results in an increase in absolute tax take and this may be evidence of this, however, the increase in number of effective taxpayers, impact of increasing economic uncertainty around Brexit, fluctuating exchange rates and a whole host of other conflicting economic data does make a fuller interpretation of the numbers less certain.’
‘Despite these significant increase in corporation tax collections, corporation tax still only accounts for around 9.2% of total tax receipts to the UK Exchequer but increasing.’
For more information, please contact Simon Wagman