Tax paid by companies has nearly doubled in 10 years
Businesses account for over a quarter of all UK tax receipts, according to new research by Thomson Reuters.
Chancellor Rachel Reeves said Labour would become more “pro-business” than previous governments in the run-up to last year’s election.
But new data by Thomson Reuters raises questions about the Chancellor’s record in office as companies face an “ever more complex tax landscape”, according to Thomson Reuters.
The total paid by companies has almost doubled between 2014/15 and 2024/25, new research has shown.
Analysts said the sharp increase from £114bn to £215bn was driven by an increase in the rate of corporation tax.
The current rate stands at 25 per cent.
The increase in employers’ national insurance will only add to businesses’ share of all tax receipts as the government seeks to raise some £24bn a year.
Multiple other taxes are hammering companies’ income, including business rates and the Digital Services Act.
The Energy Profits Levy also raises funds from profits earned by oil and gas companies. A key business taskforce said ministers should axe the tax, the Financial Times reported.
The North Sea Transition Taskforce said the current rate of 27 per cent on oil and gas profits should be replaced by a more proportionate regime in order to draw greater investment.
The higher load means that businesses now pay around 25.6 per cent of all UK tax.
Firms are also paying more on compliance, according to Thomson Reuters’ executive Jas Sandhu Dade.
“In-house teams are facing an ever more complex tax landscape,” Sandhu Dade said.
Now innovation and technology have become essential to compliance.
“With the volume of their work growing faster than firms’ capacity, technology is quickly becoming an essential way to not only manage the increased workload but also to improve results.
“Tools like generative AI present compliance advantages. Businesses are increasingly investing in AI-powered tools such as e-invoicing software to improve VAT compliance, helping to prevent conflict with HMRC.”