UK slips down tax league table

The UK has dropped two places to 16th in the annual benchmark of business tax systems, which measures the tax costs and compliance burden for a representative manufacturing company.

That’s according to a study carried out by PwC, World Bank and IFC.

The UK’s fall was caused mainly by Macedonia introducing a number of tax reforms that raised it 19 places to 7th.  Norway is now also ahead in the ranking of 189 economies.

Kevin Nicholson, head of tax at PwC, said: “The UK has a competitive tax system, but other countries are upping the ante on reform.  We can’t sit still if the Government is to make the UK the most competitive tax system in the G20.”

Corporation tax will fall to 20% in April but tax rates are only half the issue, PwC said. “For medium sized businesses, the time spent having to deal with taxes can have a bigger impact.   Reducing the compliance burden is critical.”

The PwC study found that a medium-sized UK company takes an average of about nine days to prepare, file and pay its corporation tax, labour taxes and value added tax.  

South America has the most time consuming and costly tax systems.  Compliance times on the continent average more than sevem weeks. 

The Middle East is the easiest place to pay taxes.  Tax compliance takes 12 hours for equivalent businesses in the UAE and 41 hours in Qatar, for example. The low total tax rates help these economies to the number one position in the ranking.