Do Higher Corporation Tax Rates Increase Receipts?
This historical list of tax receipts from 1987 to 2017 shows the applicable rates of corporation tax and the value of tax collected. On balance this appears to indicate that lower rates of tax generate higher tax revenues.
For example tax year 2017-18, corporation tax receipts of £56.4Bn were 30% greater than 2010-11 (8 years) whereas from 2002-2003 to 2009-10 receipts only increased by 21% despite corporation tax rates being significantly higher during that period.
Brexit and Corporation Tax
Another significant point is that although the Brexit referendum took place very early in tax year 2016-2017, corporation tax receipts increased by 17% on the previous year. The following year they increased again by 10% at a time when the rate had fallen to just 19%. These increases were contrary to official predictions prior to the Brexit referendum.
| Tax Year | Starter Rate | Small Co. Rate | Standard Rate | Tax Collected £Bn |
| 1987 - 88 | - | 27% | 35% | £14.5 |
| 1988 - 89 | - | 25% | 35% | £17.3 |
| 1989 - 90 | - | 25% | 35% | £22.4 |
| 1990 - 91 | - | 25% | 34% | £22.1 |
| 1991 - 92 | - | 25% | 33% | £19.3 |
| 1992 - 93 | - | 25% | 33% | £16.2 |
| 1993 - 94 | - | 25% | 33% | £15.3 |
| 1994 - 95 | - | 25% | 33% | £17.7 |
| 1995 - 96 | - | 25% | 33% | £22.8 |
| 1996 - 97 | - | 24% | 33% | £27.0 |
| 1997 -98 | - | 21% | 31% | £30.4 |
| 1998 - 99 | - | 21% | 31% | £31.2 |
| 1999 - 00 | 10% | 20% | 30% | £32.9 |
| 2000 - 01 | 10% | 20% | 30% | £36.6 |
| 2001 - 02 | 10% | 20% | 30% | £32.7 |
| 2002 - 03 | 0% | 19% | 30% | £29.8 |
| 2003 - 04 | 0% | 19% | 30% | £29.5 |
| 2004 - 05 | 0% | 19% | 30% | £35.6 |
| 2005 - 06 | 0% | 19% | 30% | £43.6 |
| 2006 - 07 | - | 19% | 30% | £45.7 |
| 2007 - 08 | - | 20% | 30% | £47.1 |
| 2008 - 09 | - | 21% | 28% | £41.0 |
| 2009 - 10 | - | 21% | 28% | £36.2 |
| 2010 - 11 | - | 21% | 28% | £43.3 |
| 2011 - 12 | - | 20% | 26% | £42.2 |
| 2012 - 13 | - | 20% | 24% | £40.4 |
| 2013 - 14 | - | 20% | 23% | £40.8 |
| 2014 - 15 | - | 20% | 21% | £42.5 |
| 2015 - 16 | - | - | 20% | £44.2 |
| 2016 - 17 | - | - | 20% | £51.5 |
| 2017 - 18 | - | - | 19% | £56.4 |
| 2018 - 19 | - | - | 19% | TBA |
Sources
ONS
HMRC
Figurewizard.com
...is an online forecaster / planner for profits, balance sheets, the bank, cash flows and equity. These are all produced simply from a users own forecast figures for sales, gross profit margin, overheads, investment, financing and a few simple ratios.
Three calculators based on a users results to enable enhanced planning are also produced, one for cash flow and factoring / supply chain financing, another for proposed dividends and cash flow, liquidity and solvency and the third a universal What-If Calculator.
Corporation tax and VAT transactions are automatically calculated and applied to forecast profits, balance sheets, the bank and cash flows without intervention by the user. All of the on-site sample forecasts are interactive working examples.