A new report, published this week, shows that the two thirds of UK businesses would accept a tax rise in exchange for a simpler tax system.
The survey, published ahead of the new Chancellor Rishi Sunak’s 11 March Budget announcement, where he is expected to cut entrepreneurs’ tax relief worth £2.7 billion per year, which critics are calling a blow to entrepreneurship, shows that 66 per cent of businesses would accept higher taxes if the system could be simpler and less cumbersome.
But while 12 per cent of firms said they did not find UK tax complex, the tax system is famously challenging and one of the longest and most complicated tax codes in the world. Hong Kong, whose tax system is widely admired, has a tax code that runs at fewer than 300 pages. Britain’s is around 17,000 pages long.
A spokesperson for the Institute of Economic Affairs once said: “People who are more astute and use professionals pay less than others. It brings the tax system into disrepute.” But as the Vanessa Houlder of the Financial Times* pointed out: “The reverse can also be true: ordinary taxpayers may not realise how complex the tax system can be . . . and find out the reality to their cost.”
With businesses calling for a less complicated tax system, it is time the government takes action by acknowledging the need for fewer, better thought-out tax measures, and then implementing them efficiently without imposing unreasonable burdens on taxpayers. In these taxing times, tax policy must be taken seriously.
The Budget is taking place tomorrow and, as always, our business and tax experts at Beavis Morgan will be on hand to provide commentary and a summary of the key tax changes and what they mean for you and your business.
If you have any concerns or queries relating to the announcements made within the Budget, our tax experts are available to guide you through the tax maze and help you with bespoke solutions to ensure that you and your business are as tax efficient as possible.
For further information, please contact or your usual Beavis Morgan Partner.
*Source: FT – The top 10 UK tax complexities