How Your Business Benefits From The Flybe Effect

Business is the governments tax collector and government is businesses funder of first resort.

Business hands over £165bn of PAYE, £156bn of VAT, excise duties of over £50bn. In total over £400bn annually.... But not immediately!

Some business taxes such as corporation tax are paid over a year after they were earned, some like VAT a quarter later and some like PAYE over a month later.

Whilst reliable figures don't exist its likely that at any time businesses are using around £50bn of government money freely. This is notable because it is about £10bn greater than the public sector borrowing requirements and costs the government about £700m to finance whilst saving businesses many times that given that they borrow at much higher rates.

In addition of course some companies go bust before handing over the tax to HMRC which costs about another £4bn to the public purse.

So, whilst some government tax schemes such as R&D tax credits are well known what is often forgotten until we see a notable case such as Flybe is that deferring taxation payments is businesses funding of first resort.

#tax #funding

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