The Institute of Directors (IoD) today publishes the results of a survey of its members on the administrative burdens that the tax system imposes on them. The picture is much gloomier than that painted by last Friday’s World Bank survey, which placed the UK fourth for ease of paying taxes. The IoD argues for specific steps to improve the position.

Survey Results in Brief:

  • Many business people were clear about their tax obligations, but large numbers were not: 19 per cent for corporation tax, 15 per cent for employee taxes and 10 per cent for VAT. They expend time and nervous energy clarifying their obligations, before they can start to fulfil those obligations. Automation is helping, but that does not help people running SMEs who are not sure what they have to do.
  • Many Revenue officials were found to have a poor understanding of businesses. 37 per cent of respondents agreed that this was their experience.
  • 33 per cent of respondents found it difficult to get the information they needed from Revenue help-lines or from the Revenue website. There have been improvements, but more needs to be done.
  • There was a clear appetite among IoD members to change the rules of the tax system, in the direction of lower tax rates and fewer special reliefs. The most radical options, such as taxing businesses on their accounting profits, met with a very mixed response, but there was strong support for a good look at the taxation of employees, with over half of respondents wanting the Office of Tax Simplification to turn its attention to this topic.

Richard Baron, Head of Taxation at the IoD, commented:

“The administrative burden has been reduced over the past four years, but it is still too high. The Government needs to move ahead on all fronts: the rules of the tax system, the degree of automation and the helpfulness of officials.

“Above all, we need to see tough, numerical, and published targets for continuing improvement. HMRC’s Business Plan for the next five years did show a commitment to transparency, and outlined several helpful initiatives. But we must make sure that the Government uses its new attitude to long-term planning to give itself a suitably hard time.”

To read the full survey report, click here: Tax Report

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