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LONDON (Reuters) - The corporation tax bill for Britain's biggest companies tumbled by 18 percent last year, despite a rise in profits, PricewaterhouseCoopers (PwC) said on Tuesday.
The accountancy firm's annual report on tax payments by the Hundred Group, which represents about 100 of the biggest UK-listed and headquartered companies, comes amid intense public anger about tax avoidance.
Revelations about how companies such as Starbucks (SBUX.O), Apple (AAPL.O), Google (GOOG.O) and Amazon (AMZN.O) use complex inter-company transactions to cut their tax bills have prompted UK MPs to mull possible changes in the law.
PwC denied that last year's drop in corporation tax payments was a result of avoidance and said that it was partly because of lower tax rates and fewer one-off payments.
Andrew Bonfield, chairman of the Hundred Group's tax committee, said that the downward trend in corporation tax payments, which goes back to 2005, reflected a shift in taxation away from profits to other forms of tax on business.
"The reason for that is quite a significant switch in the way that the tax burden is pushed onto corporations, much more onto taxes on property ... and onto people," said Bonfield, who is also Chief Financial Officer for utility National Grid.
Some economists believe that taxes on equipment, premises and staff deter employment. The French government, for example, is seeking to tackle unemployment by cutting payroll taxes.
Other economists, however, maintain that corporate income taxes also deter investment and job creation.
Corporation tax payments by the Hundred Group totalled 8 billion pounds in 2012, down from 9.8 billion pounds in 2011, when figures were boosted by 1 billion pounds of payments relating to previous years, the survey said.
The UK corporation tax rate fell from 28 percent to 26 percent during the survey period, and the government plans to cut the rate to 21 percent from 2014.
The results of the PwC survey come a day after the announcement that British lawmakers are to quiz representatives of the largest accounting firms - including PwC, Ernst and Young , KPMG and Deloitte - this month over their role in helping big companies to minimise tax bills.
Editing by David Goodman