London makes up more than a third of UK corporation tax receipts
London accounts for more than a third of total corporation tax receipts across the UK, new data analysed by CityAM has shown.
Data shared by the Office for National Statistics (ONS) has shown that London makes up around 36 per cent of total corporation tax income generated each year, highlighting the capital city’s dominance of UK corporate activity.
London made up around £33.4bn of the UK’s total £93.1bn in corporation tax receipts in the financial year between 2024 and 2025.
This compared to tax receipts being around 33 per cent around five years ago.
London’s share of income tax receipts has also grown over time and stabilised in recent years at around a quarter of total revenue.
Total tax receipts in the capital in the year to April 2025 reached nearly £250bn, representing around a fifth of total government revenue. London’s receipts are also nearly as large as the next two biggest regions combined.
The figures reflect London’s dominance in the UK economy, with businesses’ profits helping to fund a surge in government spending over recent years.
The release may also give Treasury officials something to think about ahead of a key consultation into fiscal devolution, which could see mayors gain greater powers over tax and spending decisions.
Karim Fatehi, the chief executive of the London Chamber of Commerce and Industry, said the numbers were a “timely reminder of the central role that London businesses play in driving the UK economy forward”.
“Policymakers must not forget that London’s status as a leading destination for global business cannot be taken for granted, and that additional burdens placed on firms in the capital will inevitably do more harm than good,” Fatehi said.
VAT is one area where London appears to fall behind the national trend, making up lower tax receipts as a share of total government revenue than the south east of England, though this may be explained by the capital’s dependence on the services sector over goods.
London’s fiscal surplus supports UK deficit
Total expenditure in London is lower than its tax receipts, meaning the capital had a fiscal surplus compared to large deficits in Northern Ireland, Wales, the north east and the north west of England.
The south east of England is the only other region which had a fiscal surplus in the financial year ending in 2025.
The UK’s budget deficit in the year came to around £153bn, which was around 5.1 per cent of GDP and was equivalent to £2,233 per head.
While welfare spending on social protection, which includes expenditure on state pensions and disability payments, makes up around 30 per cent of total managed expenditure across the country, it is just 25 per cent of managed expenditure in London.
In London, social protection spending per head comes to around £5,245 while it reaches £6,770 in Northern Ireland and £6,331 per head in the north east of England.
The government’s consultation into fiscal devolution is set to end by the Budget, with Chancellor Rachel Reeves claiming it would give local authorities “more power” to invest in transport, infrastructure and housing.
It has received criticism from some economists, including former Institute for Fiscal Studies chief Paul Johnson, who said fiscal devolution should be extended to allow mayors to change tax rates and thresholds rather than gain a greater share of total government revenues.
Manchester mayor Andy Burnham, who is standing as Labour’s candidate for a by-election in Makerfield ahead of a likely bid to become Prime Minister, has supported devolution efforts that give local authorities a greater say over public finances.