Danny McCance 4 Dec 2018 10:42am

City of London pays record-breaking £75bn in taxes

Financial services in the City of London paid a record £75bn, contributing 10.9% of the government's total tax receipts

The total haul in the year to 31 March was up by 4% from last year’s total of £72.1bn – itself a record setting figure and the highest the sector had paid in a decade.

 Research from Big Four firm PwC and the City of London Corporation found that the largest proportion again came from employment taxes, which at £32.9bn accounted for 43% of the total tax take.

The sector, which employs 1.1 million people across the UK and accounts for 3.4% of the country’s workforce, made up 11.5% of all UK employment tax receipts.

The corporation tax contribution of £14.1bn, or 18% of the total, was an increase of almost a fifth from £11.6bn in 2017, while another £1.8bn came from the bank surcharge on corporation tax.

The City paid 25.1% of all British corporation tax receipts.

However, the record take is overshadowed by fear of a no-deal Brexit.

“With Brexit edging ever closer, it is more important than ever that the UK remains competitive to safeguard the sector’s employment and tax base,” said Catherine McGuinness, policy chair at the City of London Corporation.

A no-deal could destabilise the sector and push activity away from the UK, avoidance of which is crucial, she said.

“In particular, we need to secure a transition period, deliver a mutually-beneficial future trading relationship and ensure the sector has continued access to skilled talent.”

Reports in November suggested that the UK government had reached a deal with the EU on financial services, ensuring the sector will continue to have access to the European market after it leaves the EU.