UK companies are highly taxed: it's official

A recent report from the World Bank supports the perennial gripe of UK business, that British firms pay higher taxes than most competitor nations.

According to the World Bank report, 'Doing Business in 2006', British companies pay over twice as much tax as US firms, and are well towards the top of the tax league in Europe, with only the Netherlands, Italy, Norway, Denmark, Poland and Hungary imposing a bigger tax burden as a percentage of business profits.

Out of a list of 155 countries, the UK is the 118th most expensive place to do business in terms of the portion of profits taken by the tax man (52.9%). In western Europe, Swiss companies are the least burdened by tax, at 22%, followed by French enterprises, which cough up 42% of their profits in tax each year.

Worldwide, it's no surprise to learn that the least taxed companies are in Saudi Arabia (1.4%). Those worst hit by tax are in Burundi, where firms hand over a whacking 173% of their profits.

However, for firms who feel weighed down by regulation - as well as taxes - it may be surprising to hear that the UK ranks 9th in the world for "ease of doing business". This takes into account factors such as how easy it is to start and close a business, hire and fire employees, deal with licences, obtain credit, and trade across borders.

As part of its research, the World Bank ranked countries in terms of the time it takes the average business to prepare, file and pay corporate taxes, as well as VAT and social security. Sadly, no data for the UK was available. However, for companies whose development plans include setting up abroad, it may be worth noting that dealing with the revenue is a breeze in the Maldives, where it takes the average firm less than one hour per year to complete all taxation paperwork, but a nightmare in Brazil, where paying the taxman is a full-time job, taking around 2,600 hours per annum.