Tax incentives must be simplified if they are to successfully encourage enterprise, it has been claimed.
Nearly half of all private companies think the UK tax regime should be simplified to lighten the administrative burden, according to a survey by PricewaterhouseCoopers (PWC).
The survey found that although awareness of tax incentives has increased from 41% to 56%, this has had little effect on the take-up of such benefits.
The number of respondents that have taken advantage of tax incentives has only increased by 3%, and remains low at 14%.
“It is promising to see a more positive view coming from UK privately-owned companies,” said Kevin Nicholson, PWC’s UK head of entrepreneurs and private companies.
“However, these messages must be balanced against findings that suggest there is still a negative perception of the UK tax system, and its support for enterprise, and that significant improvements are needed. This must be addressed if we are to create a true enterprise economy.”
The survey also found there was a significant rise in small businesses that feel the UK tax regime is broadly supportive – up to 27% from last year’s 17%.
However, small firms still feel that the system is less supportive of them than it is of their larger counterparts. Of companies turning over £50m+, 45% said the system was supportive.
An overwhelming 90% of small businesses said they needed an effective voice representing their interests within HM Revenue & Customs and the Treasury.
“It is the job of tax advisers, business and government to work together to identify practical solutions to make the tax system work for UK enterprise,” added Nicholson.
© Crimson Business Ltd. 2007
