Research by the British Chambers of Commerce (BCC) has found that the vast majority of businesses in the UK believe the cost of complying with the tax system has escalated over recent years.
According to its survey, 75 per cent of those polled believe the overall burden of tax administration and compliance has increased compared to five years ago, as have the time and resources required to be compliant.
At 64 per cent, VAT is the biggest administration and compliance burden for firms of all sizes, with businesses reporting ‘confusion’ over the vast array of rules and rates, and according to some, the Government should be concentrating on reducing the complexity of VAT administration to help boost firms’ growth.
There is also widespread concern over the introduction of Making Tax Digital (MTD) and confusion over what will happen to the VAT regime once the UK leaves the European Union.
Meanwhile, at 54 per cent and 41 per cent respectively, PAYE /National Insurance Contributions (NICCs) and Corporation Tax were identified as the next biggest sources of compliance burdens. Those polled cited calculating NICs as “overly complex, with the thresholds and rates businesses are required to pay being particularly confusing.
A spokesman for the BCC said that firms now routinely cite tax administration and compliance rather than regulation as their biggest single source of administrative headaches.
He added that the Government must give HM revenue & Customs (HMRC) both the resources and a clear remit to focus more on supporting, rather than punishing, small and medium-sized firms as they work to get tax right. If this were done, businesses would have more time and headroom to focus on investment and growth.