UK named 10th most effective business tax system
18th November 2016 | News
The UK has moved up five places into the world’s top 10 for effective business tax systems, according to new research by PricewaterhouseCoopers (PwC) and the World Bank Group.
The latest Paying Taxes report, which ranks the world’s 190 functioning economies on the efficiency of their tax payment systems, places the UK at number 10 amongst the G20 group; due in no small part to reduced corporation tax rates and the lighter red tape burden than most other jurisdictions.
At the top of the list, Qatar and the United Arab Emirates are ranked jointly in first place, closely followed by Hong Kong, Bahrain and Ireland.
In comparison with other nations the UK performs particularly well on post-filing transactions with tax authorities, most notably VAT refunds and error corrections on corporation tax returns.
Nevertheless, for medium-sized enterprises it still takes a fortnight to prepare, file and pay corporation, labour and value added taxes; with eight separate taxes required to be paid in total.
Kevin Nicholson, head of tax, PwC, said: “Entering the top 10 comes at a good time, sending a clear signal the UK is open for business.
“Ease of paying taxes is a good indicator for a country’s business environment more generally.
“But the UK can’t rest on its laurels, with tax reform on the cards in other countries including the US, no country’s position in the rankings is secure.”
The global average of the tax compliance burden is shrinking, falling eight hours year-on-year to 251 hours. Meanwhile the average number of payments made globally was down to 25, down 0.8 payments.
Electronic tax filing appears to have the biggest impact on easing the red tape burden on tax, with the most common tax reform feature globally found to be the implementation of electronic infrastructure for paying or filing taxes.