Data just released by HMRC has shown that collections from UK corporation tax have risen by 9.05 percent in the last 12 months – despite a decrease of one percent in the headline rate of corporation tax to 19 percent from 1 April 2017. This is an increase of £4,577m, accounting, tax and advisory practice Blick Rothenberg has explained.
Simon Wagman a partner at the firm said: “ Despite the fact that headline corporation tax rates have decreased over recent years, the tax collected from corporation tax has continued to increase by some 25 percent over three years.
"Companies House statistics indicate that the number of incorporations in the UK continue to increase, with the total register at Companies House surpassing 4 million companies for the first time in the quarter to 31 March 2018."
Mr Wagman pointed out that the data however also indicated that the rate of incorporations had decreased from its highest level in 2016. Mr Wagman suggested that the increase in incorporations up until 2016 could in part explain the increase in tax, with these new incorporations paying corporation tax for the first time in 2017/18.
"As often reported, a decrease in absolute tax rates, results in an increase in absolute tax take and this may be evidence of this, however, the increase in number of effective taxpayers, impact of increasing economic uncertainty around Brexit, fluctuating exchange rates and a whole host of other conflicting economic data does make a fuller interpretation of the numbers less certain," he said.
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