{"id":9055,"date":"2011-03-03T14:47:11","date_gmt":"2011-03-03T12:47:11","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=9055"},"modified":"2011-03-03T20:05:41","modified_gmt":"2011-03-03T18:05:41","slug":"oxford-and-hmrc-data-proves-that-the-corporate-tax-gap-is-12-billion-as-i-said-three-years-ago","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2011\/03\/03\/oxford-and-hmrc-data-proves-that-the-corporate-tax-gap-is-12-billion-as-i-said-three-years-ago\/","title":{"rendered":"Oxford and HMRC data proves that the corporate tax gap is \u00c2\u00a312 billion – as I said, three years ago"},"content":{"rendered":"

I have referred already to the Oxford report on corporation tax<\/a>, just published, and Robert Peston's reaction to it.<\/a><\/p>\n

There is however another important point to pick up, and that is that the data confirms I was right all along on the scale of the corporate tax gap.<\/p>\n

As Oxford note:<\/p>\n

\n

Within each sector there is evidence that, as a proportion of trading profit, the tax liabilities of the largest 100 companies are generally lower than for other companies.<\/span><\/p>\n<\/blockquote>\n

So, on average large companies are paying tax at less than the 21% at which small companies pay tax.<\/p>\n

Then note:<\/p>\n

\n

Independent companies pay just over 10 percent of UK corporation tax. By far the largest share of corporation tax is paid by companies that are part of multinational groups, with a similar proportion from UK-owned and foreign-owned groups.<\/p>\n<\/blockquote>\n

By 'independent companies' they mean companies that are not part of groups - which means UK small companies in other words.<\/p>\n

And<\/p>\n

\n

The top 1 percent of all companies pays 81 percent of UK corporation tax.<\/p>\n<\/blockquote>\n

In fact, based on graphs in the report it seems 90% of tax is paid by 10% of companies.<\/p>\n

Corporation tax paid in all in 2009\/10 was \u00a336bn. It was \u00a343bn in 2006<\/a> when I did my research for The Missing Billions<\/a> for the TUC.<\/p>\n

Now let's pull this data together. 90% of companies paying 90% of all corporation tax do not pay at the expected rate of 28% but instead probably pay at a rate less than 21%. Of course that's an extrapolation of what Oxford say, but it seems a fair one based on what they say. So, currently \u00a332.4bn of corporation tax paid is the result of tax charged on large companies at a rate of less than 21% (let's call it 20.5% - we don't want to over-egg this) when as Oxford note (and they would not note this unless they thought it reasonable to surmise this) a rate of 28% was expected, irrespective of allowances and reliefs.<\/p>\n

So let's gross up \u00a332.4 billion and see how much tax would have been paid if settlement had been at 28% and not 20.5%, and the answer is \u00a344.3billion. Take off the sum we first thought of - i.e. \u00a332.4 billion - and the difference is \u00a311.9 billion. Which give or take is near enough \u00a312 billion. In fact if I'd assumed the rate was 20% and not 20.5% the gap would have been \u00a313 billion.<\/p>\n

In the Missing Billions I said the expectation gap - the difference between the sum we'd expect large companies to pay and the amount they actually pay - was \u00a312 billion a year at the time. And now it's near enough almost exactly \u00a312 billion.<\/p>\n

The fact is the Missing Billions was right all along. And those who have used my data as the basis of their tax protests - saying we're not all in this together as ordinary people and small business are paying for the abuse big business and banks in particular have unleashed on our economy - can take considerable comfort from the fact that they now have the backing of Oxford University and H M Revenue & Customs data to show that the number they have been using on corporate tax avoidance - the activity that ensures they're not in this altogether with the rest of us - was right all along.<\/p>\n

Thanks Oxford. I appreciate your support.<\/p>\n

The question now is - what is anyone going to do about it - because I suspect this will only reinforce demands for action. \u00a312 billion would<\/p>\n","protected":false},"excerpt":{"rendered":"

I have referred already to the Oxford report on corporation tax, just published, and Robert Peston’s reaction to it. There is however another important point
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[124,96,64,10,50,97],"tags":[],"class_list":["post-9055","post","type-post","status-publish","format-standard","hentry","category-condems","category-conservatives","category-corporation-tax","category-tax-avoidance","category-tax-gap","category-tax-justice"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/9055","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=9055"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/9055\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=9055"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=9055"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=9055"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}