How much tax do companies pay in the UK?

Habu, Katarzyna (2017) How much tax do companies pay in the UK? Oxford University Centre for Business Taxation, Oxford UK.

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This paper uses the full population of UK corporate tax returns from Her Majesty's Revenue and Customs (HMRC) to explore the question of how much tax companies pay in the UK. In particular, I compare taxable profits of companies in the UK differentiating by their ownership type. I show that multinational companies pay the majority, 55%, of UK corporation tax, in spite of constituting only 3% of the population of companies in the UK. However, the fraction of tax revenues collected from multinationals has declined over time. Further, multinational companies pay very little tax relative to their size in comparison to domestic companies. I find that differences between size and sectoral distributions and leverage partially explain the large gap in the ratio of taxable profits to total assets between multinationals and domestic firms. In contrast, differences in investment rates and productivity between these types of companies do not.

Item Type: Other Working Paper
Keywords: tax payments, UK tax revenues, multinational companies
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation > CBT Working Papers
Date Deposited: 03 May 2018 13:03
Last Modified: 13 Mar 2019 16:23
Funders: ESRC - ES/L000016/1

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