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Financial Services: Taxation

Treasury written question – answered on 20th July 2011.

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Photo of Matthew Hancock Matthew Hancock Conservative, West Suffolk

To ask the Chancellor of the Exchequer what estimate he has made of the level of tax receipts from financial services institutions in 2011-12; and how much tax revenue was received from such institutions in each year since 1997.

Photo of David Gauke David Gauke The Exchequer Secretary

The Office for Budget Responsibility (OBR) published a forecast for corporation tax receipts from financial companies alongside their March 2011 economic and fiscal outlook. These figures are in table 2.5 of the fiscal supplementary tables, available on the internet at:

The OBR published their first fiscal sustainability report on 13 July. This report additionally includes a projection of PAYE receipts for the financial sector for 2011-12 and up to 2015-16. However, the PAYE projection is a stylised extrapolation rather than a formal forecast. This information is available in the spreadsheet containing the data for the main charts and tables from the report, available at the following link, at box 4.1 (chart B). The figures for PAYE receipts are on a national accounts basis. A formal PAYE forecast for the financial sector is not produced.


No such forecast or projection is available for any other taxes.

For past years, HM Revenue and Customs has produced a breakdown by broad industrial sector for corporation tax, PAYE income tax and class 1 national insurance contributions (NICs) and value added tax (VAT).

National Statistics for corporation tax receipts paid by several broadly-defined business sectors can be found in table 11.1 on the HMRC National Statistics website available at the following internet address. This table includes a sectoral breakdown of receipts for financial years from 2000-01. The sectors are defined by HMRC’s summary trade classifications. There are some slight methodological differences between these figures and those published by the OBR, which mean that they are not fully comparable.


Total PAYE income tax and class 1 NICs received by HMRC in respect of employee and employer liabilities combined are shown, split by sector in the accompanying table back to 1999-2000. These figures are for financial years (amounts received by HMRC between April and March). This differs slightly to the national accounts basis underlying the PAYE figures published by the OBR and referred to above (amounts received by HMRC between May and April).

The sectors are defined by the Office for National Statistics’ Standard Industrial Classification 2003.

Total receipts for PAYE income tax and class 1 NICs in respect of employee and employer liabilities combined from financial intermediation, 1999-2000 to 2010-11
Receipts (£ billion)
1999-2000 11.9
2000-01 15.5
2001-02 15.1
2002-03 15.5
2003-04 17.0
2004-05 18.7
2005-06 20.7
2006-07 24.1
2007-08 26.2
2008-09 23.7
2009-10 23.2
2010-11 26.6

Declared VAT is published by trade group in table 23 of HMRC’s latest VAT factsheet. This can be accessed at the following location on the internet and provides estimates back to 2004. https://www.uktradeinfo.com/index.cfm?task=factvat

Archived factsheets provide figures for earlier years, available at:

https://www.uktradeinfo.com/index.cfm?task= factarchive&factcategory=8

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