Overall receipts from business taxes in the six month period from April to September 2023 jumped by 22% year-on-year to £43.3bn, £7.7bn higher than the same period last year, according to new figures published by HMRC.
The huge rise in business tax receipts is largely due to the increase in the headline rate of corporation tax which came into force from April 2023, but HMRC also pointed to growth in company profits as a reason behind the rise.
Corporation tax receipts alone for the first six months rose to £39.5bn, up 17% from £33.7bn in the same period last year.
Overall tax receipts in the first six months were up 6.2% year-on-year.
The latest public sector finances data revealed that public sector net debt was £2,599.0 billion at the end of September 2023, provisionally estimated at around 97.8% of the UK’s annual gross domestic product (GDP). This is 2.1 percentage points higher than in September 2022.
Commenting on the latest figures Paul Falvey, a tax partner at BDO, said: “Today’s figures illustrate the extent to which businesses have been impacted by the recent rise in corporation tax.
“The chancellor has made it clear that he would like to see the tax burden on businesses reduce but given the state of the public finances and the likelihood of interest rates remaining high for some time, there is little prospect of this at the Autumn Statement.
“Businesses are likely to reluctantly accept that tax rates may need to stay high for some time, but they will hope that the government invests in improving HMRC’s service levels. The current poor response times and delays in modernising the tax administration system are proving a drag on business efficiency and ultimately will impair UK competitiveness.”
