Why are the banks paying so little UK corporation tax?


Type
Article
Change log
Authors
Meeks, G 
Meeks, JG 
Abstract

This paper explores the dramatic fall in receipts of UK corporation tax (UKCT) from banks, and the widening gap between the global corporation tax recorded as payable in banks' financial statements and the UKCT receipts recorded by the tax authorities. It reviews possible explanations, including changes in tax rates, in operating profits, in deductions which reduce taxable profits, and in the share of profit originating in, or recorded in, overseas jurisdictions. It assigns significant roles to tax-deductible asset impairments and to the allocation of profits among different jurisdictions. It suggests reasons why the recovery in banks' global operating profits may not be accompanied by an early sharp recovery in UKCT receipts.

Description
Keywords
banks, corporation tax, asset valuation, overseas profits, tax avoidance
Journal Title
Fiscal Studies
Conference Name
Journal ISSN
1475-5890
1475-5890
Volume Title
35
Publisher
Wiley