The amount of tax the UK government collected from the financial services sector has risen to pre-recession levels.
HMRC received £65.6bn from financial institutions in the tax year 2013/2014, which was the highest amount since 2007. The figure is an increase of 0.9% on the previous year and accounted for 11.5% of total government tax receipts.
A report from PwC shows that the biggest single source of tax revenue was employers' national insurance contribution, which accounted for 34.8% of tax collected from the financial sector.
In 2007, the government collected £67.8bn from the sector – but the largest slice of that came from corporation tax, which is now just the third biggest net contributor. This reflects the coalition government's policy of lowering corporation tax; on 1 April 2013, it was reduced from 24% to 23%. Corporation tax paid by the financial sector went down from £6.5bn to £5.4bn, year-on-year.
The report shows that 1.1 million people are employed by the financial services, with £30bn in employment-related taxes going towards the government coffers over the last tax year. The average financial sector employee paid £27,000 in tax over the course of the year.
Within finance, banks are the largest employers and also the largest payers of tax. Banks account for 29.5% of financial employees, but pay 59.5% of the tax.