The UK tax system has become more complicated over the last five years, making it more difficult to compete with overseas companies, according to two thirds of UK companies.
The survey, which was conducted by the Institute of Directors (IoD), also found that half of all respondents claimed to have increased their budget to improve tax planning and compliance.
According to the IoD, the UK’s tax system is causing it to fall behind many of rival economies that are embracing sweeping tax reform. It added that the UK government should take note of growing business concerns.
Almost 60% of companies who responded said that the tax system is having a negative impact on the UK's ability to compete with international companies.
On a more positive note the survey revealed that the majority of businesses were pleased with the new HM Revenue and Customs. While 63% of respondents said their relationship with HMRC had stayed the same over recent years, 18% thought it had actually got better.
Businesses specifically highlighted employees' business expenses, national insurance, statutory sick pay and maternity pay and procedures for employees joining and leaving as those most in need of simplification.
Head of Taxation at the IoD, Richard Baron, said: “Complexity in the tax system absorbs resources, clouds commercial decisions and can make the UK a less attractive investment location. Along with over-regulation, complicated tax rules are choking the life out of small businesses.”
© Crimson Business ltd. 2006
