Partner Article

UK most cost effective place to do business

The UK is the most cost effective place for established markets to do business, according to a new survey by KPMG.

In this years Competitive Alternatives survey, the UK moved from fourth place to the top spot, aided by lower post-recession costs for labour, industrial facilities and utilities, plus corporate tax cuts and a lower value for the pound due to the debt crisis.

26 business cost elements were analysed, including labour, taxes, real estate, transport and utilities in 14 countries around the world.

David Elliott, head of tax at KPMG in Newcastle, commented: “The UK’s top ranking amongst the mature markets shows that the changes to the corporate tax system in recent years, making it more territorial and reducing the headline rate, are having an impact and improving the competitiveness of the UK on the world stage.

“The Chancellor’s Budget announcement that the headline rate will drop to 24 percent in April takes the UK from joint 19th place to 15th in a ranking of the corporate tax rates in EU countries.

“This puts us below the global average rate of around 24.5 percent, which is more good news for companies looking to establish themselves here.

“Looking further forward the position will only improve – the corporation tax rate in the UK is expected to drop to 22 percent in 2014.”

It is also the first year that the study has compared the cost effectiveness of the major high growth countries including Brazil, Russia, India, China and Mexico. Out of these nations, China and India are the low cost leaders, offering the lowest manufacturing costs and services sector respectively.

Mr Elliott continued: “These findings are a welcome boost for our reputation globally, at a time when the Diamond Jubilee and the 2012 Olympics provide the UK with opportunities to keep the eyes of the world focussed on what we have to offer in terms of a skilled workforce, culture and commerce which can only help in boosting our reputation as an exciting place in which to live, work and do business.

“However, continued investment in our infrastructure is needed and a watchful eye must be kept on issues around regulation and taxes which could damage our ability to remain competitive,”

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