Accredited official statistics

Corporation Tax statistics commentary 2022

Published 22 September 2022

£67.0 billion total Corporation Tax receipts for 2021 to 2022

£51.4 billion total Corporation Tax liabilities for 2020 to 2021

1. About this release

This annual publication provides a breakdown of Corporation Tax (CT) receipts and liabilities by number of companies, income, deductions, industry sector, company size and financial year. It includes the CT, Bank Levy and Bank Surcharge receipts figures for the financial year 1 April 2021 to 31 March 2022, and the first published CT liability estimates for company accounting periods ending between 1 April 2020 to 31 March 2021.

The publication therefore provides statistics showing how the initial impacts of coronavirus (COVID-19) have affected CT liabilities.

2. Headline findings

The key findings in this year’s publication are that:

• total CT receipts increased by 28% in financial year 2021 to 2022 following the fall in receipts in 2020-21
• the increase in CT receipts was seen across all sectors with the exception of Life Assurance
• CT liabilities decreased by £2.6 billion in financial year 2020 to 2021, where the effect of COVID will be a key factor
• the largest percentage drop in CT liabilities was in travel agency, tour operator and other reservation service and related activities
• postal and courier activities saw the largest percentage increase in CT liabilities in financial year 2020 to 2021

3. Impact of COVID-19 on Corporation Tax receipts and liabilities

During the financial year 2020 to 2021, the UK experienced 3 national lockdowns, closure of non-essential shops, restricted international and domestic travel, and regional lockdowns when COVID-19 cases spiked.

Analysing CT return data, this disruption to companies contributed to a reported:

• £35 billion or 10% drop in company trading profits
• £17 billion or 11% increase in trading losses arising in the financial year
• increase in carried back losses claimed against profits from 2017 to 2018 onwards, partly due to temporary legislation introduced in response to COVID-19, allowing companies to carry back losses by up to 3 years
• £2.6 billion or 5% decrease in CT liabilities

The detailed changes over time in taxable income, deductions and CT liabilities can be found in the accompanying Corporation Tax statistics data tables 2022.

A summary of the impact of COVID-19 on industry sectors can be found in the Corporation Tax liabilities by SIC section of this commentary, highlighting which sectors saw the largest percentage decreases and increases in CT liabilities during financial year 2020 to 2021.

The recovery of the economy and company profits following the lifting of COVID-19 restrictions can partly be seen in the CT receipts data, which is summarised in the following sections.

4. Total receipts and liabilities

Figure 1: Corporation Tax liabilities and receipts between financial year 2012 to 2013 and 2021 to 2022

Figure 1 above shows both CT liabilities and receipts from financial year 2012 to 2013 up to financial year 2020 to 2021 for liabilities, and financial year 2021 to 2022 for receipts.

Corporation Tax receipts

The key statistics visualised in figure 1 for CT receipts show that:

• receipts increased sharply in financial year 2021 to 2022 to £67.0 billion , an increase of £14.6 billion (28%) on the previous year, largely driven by a strong recovery in the economy and company profits following the COVID-19 pandemic
• looking at earlier years, receipts increased steadily from financial year 2013 to 2014 until financial year 2018 to 2019
• receipts increased sharply in financial year 2019 to 2020 mainly because of a payment timing change for the largest companies, which brought forward their Corporation Tax quarterly instalment payments by four months
• receipts fell sharply in financial year 2020 to 2021 due to a combination of COVID-19 and the unwinding of the payment timing change described above

Corporation Tax liabilities

The main points to note in figure 1 for CT liabilities are that:

• financial year 2020 to 2021 saw the largest year-on-year decrease in CT liabilities since 2012 to 2013
• liabilities decreased by 5% in the latest year, from £54.0 billion in financial year 2019 to 2020, to £51.4 billion in 2020 to 2021
• liabilities had previously increased from £43.2 billion in financial year 2015 to 2016 and plateaued at around £54 billion between financial years 2017 to 2018 and 2019 to 2020

5. Corporation Tax receipts by broad industry sector

Figure 2: Corporation Tax receipts by broad industry sector, financial year 2012 to 2013 and 2021 to 2022

Figure 2 above shows CT receipts since financial year 2012 to 2013, by broad industry sector: Industrial and Commercial, Financial, Life Assurance, Bank Surcharge, and Ring-fenced Oil and Gas (Offshore Corporation Tax).

The figure shows that CT receipts have increased across all broad industry sectors in the latest financial year 2021 to 2022, except Life Assurance. Key statistics to note include:

• Industrial and Commercial is the largest of the broad industry sectors and accounts for £50.4 billion, or around 75%, of total receipts for financial year 2021 to 2022 and experienced an increase of £10.6 billion (27%) on the previous year, which reflects a strong recovery in the economy and company profits following COVID-19

• Financial sector receipts (excluding Life Assurance) increased by £2.5 billion (29%) in financial year 2021 to 2022, reflecting recovery in financial company profits following COVID-19

• receipts from Life Assurance companies fell by £0.9 billion (43%) in financial year 2021 to 2022

• Bank Surcharge receipts increased by £0.9 billion (66%) in financial year 2021 to 2022, reflecting a strong recovery in banking sector profits following COVID-19

• offshore Corporation Tax receipts increased by £1.4 billion (approximately 300%) in financial year 2021 to 2022, driven by increased demand for oil and gas as the global economy recovered from COVID-19

6. Corporation Tax liabilities by Standard Industrial Classification of economic activities (SIC)

Figure 3: Corporation Tax liabilities by SIC sector, financial year 2020 to 2021

Figure 3 above shows CT liabilities by SIC sector for financial year 2020 to 2021, ordered by size of liabilities. Some sectors have been combined to protect taxpayer confidentiality.

The data that underpins this figure, and the commentary below, can be found in Table 6 of the Corporation Tax statistics data tables 2022.

The main points to note in figure 3 are:

• the Financial and Insurance sector remained by far the single largest contributor to CT liabilities, with £11.8 billion or 23% of total liabilities

• the Professional, Scientific and Technical sector was the second largest contributor with £7.6 billion or 15% of total CT

• the top 3 sectors are completed by Wholesale and Retail Trade and Repairs, and combined they account for 51% or £26.3 billion of total CT liabilities

• despite the dominance of Financial and Insurance to the CT liabilities total, this sector represents only 2.5% of companies who paid CT in financial year 2020 to 2021

• except for Financial and Insurance, the sector with the biggest difference between liabilities and number of companies, was Construction, representing 13% of companies who paid CT, but contributing 7.5% of total CT liabilities

• the sector that contained the largest proportion of CT taxpayers was Professional, Scientific and Technical, with 21% of the total

Figure 4: Change in CT liabilities by SIC sector, financial years 2019 to 2020 and 2020 to 2021

Figure 4 above shows the change in CT liabilities by SIC sector, between financial years 2019 to 2020 and 2020 to 2021.

The main points to note in figure 4 are that:

• despite the overall drop in CT liabilities, of the 18 sectors represented, 9 saw a year-on-year increase in CT liabilities, and 9 a year-on-year decrease

• although there were an equal number of sectors increasing as decreasing, there was significant disparity in the value

• the 9 sectors experiencing a growth in CT, increased by a combined total of £1.6 billion, whereas the 9 who decreased did so by a combined total of £4.2 billion

• the largest increase in total CT liabilities was in the Wholesale and Retail Trade and Repairs sector, which saw a £348 million or 5% increase

• the largest percentage increase occurred in the Health and Social Work SIC sector, increasing by 14% or £168 million; this sector includes residential care activities, hospital activities, social work and child day-care activities

• for the second year running, the Mining and Quarrying sector saw the largest decrease in liabilities, dropping by 71%, or £1 billion

• the presence of offshore oil and gas companies in Mining and Quarrying, is a possible reason why this sector saw such a significant decrease, with oil prices in 2020 to 2021 falling to their lowest levels since 2003 to 2004

Figure 5: Highest percentage increase and decreases in CT liabilities by lower level SIC division, financial year 2020 to 2021

Figure 5 above shows the 5 highest and 5 lowest percentage changes in CT liabilities at a more granular level of industry sector, known as SIC division, between financial years 2019 to 2020 and 2020 to 2021. The liabilities for all SIC divisions (not just those with largest changes) are shown in Table 7 of the Corporation Tax statistics data tables 2022.

Some points to note in figure 5 are:

• the largest percentage increase in CT liabilities occurred in the postal and courier activities SIC division, with a 97% or £95 million increase, possibly driven by the increase in online shopping during COVID-19 lockdowns

• the 34% increase in the manufacture of chemicals and chemical products division, includes companies who manufacture soap, detergent and paint; national hand washing campaigns along with the increase of home improvement projects that reportedly took place during 2020 to 2021, possibly contributed to this increase

• the travel agency and tour operator activities SIC division had the largest percentage drop in CT liabilities, with a decrease of 77% or £121 million, possibly as a result of the massive disruption to travel caused by COVID-19

• disruption to industry, collapse of vehicular travel during financial year 2020 to 2021 and the subsequent drop in demand for petrol and diesel, possibly contributed to the 62% drop in the manufacture of coke and refined petroleum products, as this SIC division involves the production of motor fuel, fuel oil and refinery gases

7. Trading losses arising in-year by SIC

Figure 6: Trading losses arising in-year by SIC sector, financial years 2020 to 2021 and 2019 to 2020

Figure 6 above shows the trading losses arising in-year, reported by companies on the CT600, split by SIC sector for financial years 2020 to 2021 and 2019 to 2020.

These are the total trading losses that have arisen during the financial year. Companies may have used some, all, or none of these losses to reduce their taxable income in 2020 to 2021. Companies may be able to carry losses back to a previous year, or forward to a future year.

The main points to note in figure 6 are:

• the Financial and Insurance sector had the largest amount of declared losses with £25.3 billion

• Information and Communication had the second largest amount with £22.5 billion, followed by Professional, Scientific and Technical (£18.9 billion), and Manufacturing (£17.0 billion)

• the top 4 sectors contributed just over half of the total amount of £164.3 billion in trading losses for all sectors

Figure 7: Percentage change in trading losses arising in-year between financial years 2019 to 2020 and 2020 to 2021

Figure 7 above displays the percentage change in trading losses arising in-year, between financial years 2019 to 2020 and 2020 to 2021.

The data underpinning figure 7 can be found in Tables 4 and 5 of the Corporation Tax statistics data tables 2022.

The main points to note in figure 7 are:

• the top 3 sectors with the highest percentage increase in trading losses are: Transport and Storage, Accommodation and Food, and Arts, Entertainment and Recreation

• this possibly reflects the 3 sectors hardest hit by COVID-19 in 2020 to 2021

• Transport and Storage experienced both the largest increase in trading losses with £6.4 billion, and the largest percentage increase at 139%

• although the postal and courier services SIC division experienced the largest percentage increase in CT liabilities, Transport and Storage (to which the postal and courier division belongs) had the largest increase in losses possibly due to other SIC divisions in this sector, such as land, air and water transport

8. Corporation Tax liabilities by ‘size’ of company

Figure 8 below groups CT liabilities into the bands £0 to £9,999; £10,000 to £49,999; £50,000 to £999,999; and above £1 million for the financial year 2020 to 2021. It shows the number of companies and the total liability that sit in each band.

The figure illustrates how the majority of CT liabilities are accrued from a relatively small number of companies.

In financial year 2020 to 2021, approximately 4,100 companies (0.3% of all companies who had an amount of tax to pay) had liabilities over £1 million, yet these contributed 52%, or £26.8 billion, of total CT liabilities.

In contrast, approximately 1 million companies (68% of all companies who had an amount of tax to pay) had liabilities of less than £10,000 and these contributed just 7%, or £3.4 billion, of the CT liability total.

The number of companies with £0 in CT liabilities increased in financial year 2020 to 2021 by 8% or approximately 95,000. They represented 46% of all companies who submitted a CT return compared to 44% in financial year 2019 to 2020.

Figure 8: Number of companies and their CT liabilities by liability band, financial year 2020 to 2021

9. Publication Information

This is an annual publication published on 22 September 2022. The next release is scheduled for autumn 2023.

For press queries, please contact:

• HMRC Press Office on 03000 585 018

For statistical queries or feedback on this publication, please contact:

• D Pritchard – CT receipts

• N Yates – CT liabilities