Two thirds of London’s corporation tax will fall to SMEs » SMEInsider

Two thirds of London’s corporation tax will fall to SMEs

rsz_britain-2938_1920

Small businesses will have to cough up most of the estimated 64 per cent increase in London’s corporation tax bill in the next 10 years.

This is according to research from chartered accountancy firm Perry’s, based on figures from both the Office of National Statistics and the City of London Corporation.

It suggested that SMEs in the capital will have to pay out a predicted £18 billion of the total corporation tax bill by 2026.

Currently, Perry’s said, 294,000 businesses pay the levy in London, and 99 per cent of that is paid by small and medium-sized enterprises.

 

Good news for profits

CEO of Perry’s Chartered Accountants, Stewart Pope, told Bdaily: “We estimate that small to medium businesses in the capital are paying an average annual corporation tax bill of £37,000 each, which is set to rise to £62,000 each by 2026.

But this, he said, also meant that profits for London-based SMEs would likely increase in the same period.

“The higher contributions also reflect the increase in profits that businesses are generating, which is a positive indication that the capital continues to remain a great place to do business,” Pope added.

  • PeterJ42

    Considering 99% of companies are SMEs, 66% sounds pretty good.
    Reminded of this…

    10 people go for beer. The bill comes to $100…
    They pay the way we pay our taxes…

    First 4 (poorest) pay nothing.
    5th pays $1, 6th pays $3, 7th pays $7, 8th pays $12.
    9th pays $18, 10th (richest) pays $59.
    The 10 drank together regularly, happy with the arrangement.

    1 day the barperson said “Since you’re such good customers, I’m cutting the bill by $20″.
    The group still wanted to pay like taxes. The first 4 were unaffected – they still drink for free.
    The other six, the paying customers, puzzled how to divide the $20 windfall so everyone gets a fair share?

    $20 divided by 6x $3.33. Subtracted from everyone’s share, the 5th and 6th would be paid to drink beer.
    The barperson suggested it would be fair to reduce each bill by a higher percentage the poorer they were, like the tax system, and worked out the amounts each should pay.
    The 5th, like the first 4, now paid nothing (100% saving).
    6th now paid $2 instead of $3 (33% saving), 7th – $5 instead of $7 (28% saving).
    8th – $9 instead of $12 (25% saving), 9th – $14 instead of $18 (22% saving).
    10th – $49 instead of $59 (16% saving).

    Each was better off than before. The first 4 continued to drink for free. But they began to compare their savings.
    “I only got a dollar out of the $20 saving,” declared the 6th, “but he got $10 – pointing to the 10th!”
    “Yeah, that’s right,” exclaimed the 5th. “I only saved a dollar too. It’s unfair he got ten times more benefit than me!”
    “That’s true!” shouted the 7th. “Why should he get $10 back, when I got only $2?The wealthy get all the breaks!”
    “Wait a minute,” yelled the first 4 in unison, “we didn’t get anything at all. This new tax system exploits the poor!”

    The nine told the tenth to go away.
    Next night the 9 had their beers. When the bill came, they didn’t have enough money between them for 1/2 the bill!
    That is how tax works. Tax the rich too much and they just may not show up anymore, perhaps drinking overseas, where the atmosphere is friendlier.