In the period from April to September 2023, business tax receipts saw a significant surge, with an impressive 22% year-on-year increase, totaling £43.3bn. This figure represents a staggering £7.7bn more than the previous year, as revealed by the latest data published by HMRC.
The considerable rise in business tax revenues can be predominantly attributed to the implementation of the higher headline rate of corporation tax, effective since April 2023. However, HMRC also acknowledged the growth in company profits as a contributing factor.
Specifically, corporation tax receipts alone for the first six months stood at £39.5bn, marking a notable 17% increase from the £33.7bn reported during the same period last year.
Overall, tax receipts during the initial half of the year demonstrated a respectable 6.2% year-on-year growth.
Furthermore, the most recent public sector finances data indicated that public sector net debt reached £2,599.0 billion by the end of September 2023. This provisional estimate represents approximately 97.8% of the UK’s annual gross domestic product (GDP), surpassing September 2022 figures by 2.1 percentage points.
In response to these findings, Paul Falvey, a tax partner at BDO, commented, “Today’s figures illustrate the extent to which businesses have been impacted by the recent rise in corporation tax.”
Falvey expressed the likelihood that the Chancellor seeks to alleviate the tax burden on businesses. However, considering the current state of public finances and the anticipated continuation of high interest rates, prospects for a reduction in tax rates seem limited, as confirmed in the Autumn Statement.
While businesses may reluctantly accept the prolonged period of high tax rates, they harbor hope that the government will prioritize investments in enhancing the service levels of HMRC. The challenging response times and delays in modernizing the tax administration system currently hinder business efficiency and ultimately jeopardize the competitiveness of the UK.
In the period from April to September 2023, business tax receipts saw a significant surge, with an impressive 22% year-on-year increase, totaling £43.3bn. This figure represents a staggering £7.7bn more than the previous year, as revealed by the latest data published by HMRC.
The considerable rise in business tax revenues can be predominantly attributed to the implementation of the higher headline rate of corporation tax, effective since April 2023. However, HMRC also acknowledged the growth in company profits as a contributing factor.
Specifically, corporation tax receipts alone for the first six months stood at £39.5bn, marking a notable 17% increase from the £33.7bn reported during the same period last year.
Overall, tax receipts during the initial half of the year demonstrated a respectable 6.2% year-on-year growth.
Furthermore, the most recent public sector finances data indicated that public sector net debt reached £2,599.0 billion by the end of September 2023. This provisional estimate represents approximately 97.8% of the UK’s annual gross domestic product (GDP), surpassing September 2022 figures by 2.1 percentage points.
In response to these findings, Paul Falvey, a tax partner at BDO, commented, “Today’s figures illustrate the extent to which businesses have been impacted by the recent rise in corporation tax.”
Falvey expressed the likelihood that the Chancellor seeks to alleviate the tax burden on businesses. However, considering the current state of public finances and the anticipated continuation of high interest rates, prospects for a reduction in tax rates seem limited, as confirmed in the Autumn Statement.
While businesses may reluctantly accept the prolonged period of high tax rates, they harbor hope that the government will prioritize investments in enhancing the service levels of HMRC. The challenging response times and delays in modernizing the tax administration system currently hinder business efficiency and ultimately jeopardize the competitiveness of the UK.