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Tax take from the City cut by more than half in the slump
29.07.09
The financial crisis has seen the tax paid by the City more than halve over the past two years, it emerged today.
City firms paid £32.5 billion to the taxman in the year to the end of March — £35.3 billion less than the £67.8 billion contributed two years earlier.
The plunge followed multi-billion pound losses across the financial sector, thousands of job cuts, and smaller bonus payments.
It highlighted the impact the turmoil in financial markets has had, not just on the UK economy but also on the already creaking public finances.
However, the amount of tax paid by the City was still enough to pay for the entire public security budget, including police, fire brigades, law courts and prisons, or most of what the Government spends on defence and the armed forces.
The figure emerged following a parliamentary question in the House of Lords from Malcolm Pearson, a member of the UK Independence Party, who tabled the question to highlight the contribution the City makes to the economy.
