UK’s largest companies generated over £90bn in taxes in 2023/24 as taxes borne increase by 10.2%, PwC study shows

• For the first time in 20 years of the survey, the 2024 report covers a period that included an increase to the headline rate of Corporation Tax. Corporation Tax made up three quarters of the 10.2% increase in taxes borne - those that are a direct cost to companies in the survey. As a result, the average total tax rate() remains high, at 47.5%.

• Corporation tax is just one of 31 business taxes borne and collected. For every £1 of Corporation Tax, the 100 Group companies paid another £1.97 in other taxes borne and £5.86 in taxes collected. The survey has seen nine new taxes added since 2006.

• 100 Group companies contributed £29.5bn of capital investment, up 19.7% and representing 11.5% of UK business investment.

• Nine in ten (88%) companies say that the Apprenticeship Levy is in need of reform.

The UK’s biggest companies generated an estimated £93.3bn in tax during the 2023/24 financial year, according to PwC’s 20th annual report on the Total Tax Contribution (TTC) of the 100 Group.

Both taxes borne and taxes collected increased in this year’s survey, by 10.2% and 1.8% respectively. The companies contributed £31.8bn in taxes borne - those that are a direct cost to the company including corporation tax - and a further £61.5bn in taxes collected, such as income tax and employee national insurance contributions (NICs) deducted under PAYE, for the year ended 31 March 2024. 

The report has been compiled from data provided by 90 of the largest companies in the UK, and has been extrapolated to estimate the overall contribution of the 100 Group as a whole.  The report shows the impact of tax rises introduced in the aftermath of the COVID-19 pandemic and the global energy crisis, alongside an analysis of how tax contributions have changed over the past 20 years. 

The 100 Group employed approximately 1.8 million people in 2023/24, or 5.4% of the total UK workforce, paying an average wage of £42,902 (national average wage is £37,430) and contributing employment taxes of £15,787 per employee on average.

Breakdown of taxes paid

The largest tax borne by the companies was corporation tax at 33.5% of total taxes borne, up from 29.0% in 2022/23. Employer NICs is the second largest tax borne at 24.3% of total taxes borne, followed by business rates (14.0%) and irrecoverable VAT (13.5%). 

Employment taxes at 32.0% are the largest share of taxes collected (income tax deducted under PAYE: 26.0% and Employee NIC: 6.0%) followed by fuel duties at 23.0%. 

Taxes borne increased by 10.2%, with Corporation Tax, Energy Profits Levy and Electricity Generator Levy the main drivers. Corporation Tax made up three quarters of the increase, driven by increasing profits and the higher 25% rate. The increase in Energy Profits Levy was due to a full year of receipts at a higher 35% rate, while the Electricity Generator Levy was new to the survey in 2024. 

There were 31 business taxes identified in the report, the highest number since the survey began. 

Investment and R&D

The report highlights that total capital investment increased 19.7% year-on-year reaching £29.5bn in 2023/24. Meanwhile, R&D expenditure, down marginally on a like-for-like basis, totalled £11.2bn.

Apprenticeship Levy effectiveness

This year, contributing companies were asked for their perspectives of the effectiveness of the Apprenticeship Levy and potential improvements. 

The majority of responding companies were either positive or neutral on the levy, however, 27% noted they were ‘unsatisfied’ or ‘very unsatisfied’. Nine in ten (88%) companies agreed that the Apprenticeship Levy is in need of reform.

While there is a relatively even distribution of apprenticeships by level, apprenticeships by age are skewed towards those older than 25. The trend of declining apprenticeships for younger people has been a feature of the Apprenticeship Levy since its launch in 2017, and is one area that the government is targeting in its upcoming reform of the system(). 

Total apprenticeship starts 2023/24, by age

The main barriers preventing companies spending 100% of their levy funding were cited as the lack of flexibility around the type of training that qualifies, resource constraints, and bureaucracy.

Respondents suggested policymakers should focus reform efforts on increasing flexibility in the system. 

Andy Agg, Chair of the 100 Group tax committee, says:

"The 100 Group survey shows the significant contribution that large companies make to the public finances as well as the wider economy. Collectively, these companies account for almost £30bn of capital investment, £11bn of R&D expenditure and 1.8 million jobs, while each company supports an average of 5,000 UK suppliers. 

“The 20 years of the survey shows that the contribution from large companies has been sustained, despite significant economic events over this period. The 10% increase in taxes borne in this year’s report is the result of new taxes and the higher rate of Corporation Tax that were introduced in the aftermath of the pandemic and the global energy crisis."

Andy Wiggins, tax partner at PwC, says

“The 100 Group Total Tax Contributions survey is now in its 20th year. The TTC framework was originally developed to improve understanding of the tax system and to provide transparency around the taxes that companies pay. Increasingly, companies are using the framework to report on their full contribution to public finances around the world, helping to improve trust in businesses and the tax system as a whole. 

“The twenty years of the survey provides a fascinating insight into how policy changes and economic events have affected the overall contribution from large businesses. We’ve seen the Corporation Tax rate come down from 30% for the first few years of the survey, to 19% for the six years preceding this report. This year is the first year that the rate has increased since the survey began. On top of that, the number of UK business taxes has increased from 22 to 31 over the survey period, with three new taxes introduced within the last two years alone.”  

Ends.

Notes to editors

Trend in Total Tax Contribution*, 2023 - 2024

* trend on a like-for-like basis for 85 companies that provided data in 2023 and 2024

In 2024, the Total Tax Rate remains high at 47.5%, but is 1.5 percentage points lower compared to 2023.

Total Tax Rate, 2008-2024

About PwC

At PwC, our purpose is to build trust in society and solve important problems. We’re a network of firms in 149 countries with more than 370,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more and tell us what matters to you by visiting us at www.pwc.com.

About the 100 Group 

The 100 Group of Finance Directors represents the view of the finance directors of FTSE 100 and several large UK private companies. Our member companies represent the vast majority of the market capitalisation of the FTSE 100 Index. Our aim is to contribute positively to the development of UK and international policy and practice on matters that affect our business, including taxation, financial reporting, corporate governance and capital market regulation. We believe that good fiscal and tax policy is grounded upon long-term stability, simplicity and consistency. Our members collectively employ 5.4% of the UK workforce and, in 2024, paid or generated taxes equivalent to 9.9% of total UK government receipts.