Bloomberg News

U.K. Financial Firms’ Tax Contributions Rose in 2011, PwC Says

December 16, 2011

Dec. 16 (Bloomberg) -- Britain’s financial services firms generated 63 billion pounds ($98 billion) of tax for the government last year, an 18 percent rise on the previous year, helped by the introduction of the bonus levy, a survey showed.

The firms accounted for 12 percent of all government tax revenue in the 12 months through March, according to the survey by PricewaterhouseCoopers commissioned by the City of London Corporation. The one-time bank payroll tax, levied on 2009 bonuses, generated 3.4 billion pounds of revenue.

Chancellor of the Exchequer George Osborne has said the coalition government will require firms to pay the “maximum sustainable” amount of tax without forcing them to quit the country. The U.K. introduced a one-time tax on bonuses in 2009 and a levy on lenders’ balance sheets the following year. London is home to Europe’s biggest stock exchange, derivatives market and asset-management firms. It’s also the world’s biggest market for foreign exchange trading.

“In 2012, we would expect the study to also show the effect of further tax increases, including the 20 percent value- added tax rate, which came in towards the end of the 2011 study period, and the new bank levy paid for the first time in 2011,” PwC said in the report.

The figures, extrapolated from data provided by 43 firms, include employment taxes and corporation tax. The City of London, the municipal government for the capital’s main financial district, also lobbies on behalf of the financial services industry.

--Editors: Edward Evans, Francis Harris.

To contact the reporter on this story: Gavin Finch in London at gfinch@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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