According to the Confederation of British Industry (CBI), the overall business tax contribution in the UK in 2017/18 was £186 billion. This reveals that business taxes have been increasing faster than other taxes.
The CBI’s analysis also revealed that corporation tax receipts have been increasing, despite corporation tax cuts and falling profits.
As the analysis points out, businesses also pay a suite of other taxes, such as fuel duties, energy taxes, national insurance contributions. Unlike corporation tax, some of these other taxes hit business’ before they make a profit which can be detrimental to those businesses requiring large investment.
Interestingly, it is not only taxes that are targeted at specific sectors and activities that lead to sectoral disparities, taxes such as business rates, energy taxes and fuel duties are not paid by all businesses and are highly dependent on the business model.
For example, the taxes paid by retailers have been in the news lately because business rates add to Corporation Tax and National Insurance Contributions (NICs). Meanwhile in the manufacturing sector, businesses not only have to pay Corporation Tax and NICs but also business rates, energy taxes and fuel duties.
As the CBI’s report underlines, businesses make a vital contribution to society. It is therefore critical that the full suite of business taxes is taken into account not just Corporation Tax.