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Reduce legislative burden, say PwC

The Government must ease the legislative burden for businesses if Britain is to move to the top of the business tax league tables, according to PwC.

If the planned reduction in corporation tax from 26% to 23% was accelerated and effective from Budget Day, the UK would move from 18th to 14th place in the global rankings for ease of paying taxes.

To get into the top 10, the Government would also need to address the issue of compliance, unless tax rates were substantially lowered. By reducing the time UK SMEs spend on tax compliance from the current 100 hours to 75 hours, Britain would move to 11th place. Opportunities for lessening compliance time include moving to annual reporting for PAYE and VAT.

Melanie Malsbury, tax partner at PwC believes that a change to the current tax regime is necessary if the UK is to attract foreign investors.

She commented: “Other countries have specific resources or markets as draws - for us a stable financial and business environment is the key attraction.

“It’s not just about competitive tax rates, it’s about the overall tax compliance burden and, most important of all, certainty - a culture and policy framework that is perceived to be welcoming rather than hostile to business investment.”

If the UK is to break into the top 10, tax payments each year would have to decrease from eight to six. To do this, certain taxes would have to be abolished or integrated such as corporation tax with business rates.

Melanie is now hoping that the Budget will bring positive changes for businesses when it is announced.

She added: “Much work is being done here, not only on the compliance burden but on corporation tax reform and we hope for emphasis on these positive signals from the Chancellor on Wednesday.

“He has the opportunity to really underpin the statement that the UK is “open for business.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .