UK corporation tax bills hit ‘record’ £88bn 

UK corporation tax bills hit ‘record’ £88bn 

This figure marked an overall rise of 58% over five years, having risen from £55.6bn in 2018/19

UK corporation tax bills hit an “all-time high” of £87.7bn last year, rising by 8% from £81.2bn the prior year, according to UHY Hacker Young.This figure marked an overall rise of 58% over five years, having risen from £55.6bn in 2018/19.

The main rate of corporation tax was raised from 19% to 25% on April 1 2023, and this rise is expected to feed through into high corporation tax payments over the next year, UHY said.

The firm added that the increase in corporation tax took the UK to being at the same level as France (25%) and Italy (24%) and above the European average of 21.5%. 

Anthony Davies, tax partner at UHY Hacker Young, said: “The last few years have seen a huge jump in the share of profits that UK businesses have to pay in tax. Higher corporation tax means less money for businesses to reinvest in job creation and R&D. It also means reduced returns for shareholders. 

“One of the attractions of the UK to inward investors was its relatively low tax rate compared to other European countries but that advantage has been lost. With this government promising to deliver economic growth, one of the first steps they should be taking is publishing a roadmap of how they are going to reduce corporation tax down to its pre-Covid levels.” 

He added: “Small businesses would also like to see the small profits rate – which currently only applies to companies with profits under £50,000 – cover more companies.”

This article is sourced from the following link:

https://www.accountancytoday.co.uk/2024/07/24/uk-corporation-tax-bills-hit-record-88bn/