Amount of UK red tape comes under fire

Amount of UK red tape comes under fireA new report suggests that the UK’s tax system is being limited by the amount of red tape involved.

According to a study by the World Bank report, the UK’s tax system is hampering the country’s economic performance, especially when it comes to boosting competition and increasing overseas investment.

The government has attempted to reduce the burden of tax on UK firms in recent months and plans to cut the corporation tax from 28 per cent in 2010 to 20 per cent by April. However, the slow pace of tax reform is still preventing international firms considering relocating operations to the UK.

Britain is now 16th in the World Bank and PwC’s annual benchmark of business tax systems – two places lower than in 2013.

This also means the UK is behind Macedonia and just one place ahead of Kazakhstan, in terms of overall tax competitiveness.

“The UK has a competitive tax system, but other countries are upping the ante on reform. We can’t sit still if the Government is to make the UK the most competitive tax system in the G20,” said Kevin Nicholson, head of tax at PwC.

“Corporation tax will fall to 20 per cent in April but tax rates are only half the issue. For medium sized businesses, the time spent having to deal with taxes can have a bigger impact. Reducing the compliance burden is critical.”

According to the report, medium-sized British businesses took an average of around 14 days to prepare, file and pay their corporation, labour and value added taxes in 2013, with many having to prepare and process eight different taxes.

Although this was less that the European average, it was still below a number of other countries, including Ireland, Qatar and the United Arab Emirates.

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