Government auditor report is a wake-up call
The National Audit Office report showing the UK banking sector as the biggest contributor of corporation tax should be a wake-up call for government decision makers, says British Bankers' Association Chief Executive Angela Knight.
"This report showed that the banking sector pays more corporation tax than any other sector in the UK. Without the global success of British banking there would be a gaping hole in the nation's finances, as well as in people's pensions."
"We are happy to pay this tax: we are the biggest contributors because we generate so much of the UKs economic growth, providing jobs and creating wealth. Britain is an acknowledged world leader in banking so it is absolutely correct that this industry contributes accordingly to the Exchequer."
"Yet in the face of massive competition, and a communications revolution which means service industries can be based anywhere in the world, we need the Whitehall decision makers reading this report to realise that we continue to work in a competitive global environment. Regular communication and a full understanding of our industry's contribution to the economy are essential to effective planning of Britain's financial future."
Research by the British Bankers' Association shows that the financial services industry is the engine room of the UK, putting enough into the economy each year to build 36 news hospitals or 600 city academies. The financial services sector pays:
- a £50 billion contribution to the UK economy (2005)- some 8.5 per cent of the UK's Gross Domestic Product (GDP) equivalent to around £850 for every man, woman and child in the country;
- corporation tax payments of £9 billion (2004-05)that would have paid for 36 new hospitals or 600 city academies;
- employment for three million people with nearly half a million in banks alone;
- inward investment by overseas banks in the UK topping £36 billion - the equivalent of £600 from each of us; and
- more than £10 billion in dividends to shareholders last year, boosting the values of pension funds and other stock market investments.
The top five corporate charitable donors in the UK are all banks.
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Notes to Editors
The National Audit Office analysed the tax raised from the 700 companies handled by the large business service of HM Revenue & Customs. It found that more than one-third of total corporation tax receipts handled by the large business service came from the banking sector.