Tax News 12

Tax News 12 : 2010-08-27

UK Businesses Dissatisfied with HMRC

A report by TNS-BMRB on behalf of HM Revenue and Customs has revealed that 64% of large businesses have grown more despondent over the UK tax system during the last 12 months, leading to around 20% considering relocating abroad.

The research found that businesses felt the tax related red tape burden was on the rise and that HMRC was becoming less transparent in its decision making.

“If only a small fraction of those companies that have considered relocating did relocate abroad it would decimate the UK’s tax revenues,” commented Roy Maugham, tax partner at UHY Hacker Younger.

“Whilst the Treasury might feel that deficit reduction means it cannot cut business taxes too quickly there is also a risk to the UK’s finances from having a tax system that is uncompetitive compared to places like Ireland.”

“These results show businesses are increasingly dissatisfied with the way the tax system and HMRC is working.”

Other results from the research paid for by HMRC indicate that:

• 30% of large businesses said that the way HMRC administers the tax system has a negative impact on the UK’s competitiveness;
• Only 36% of large businesses rated the HMRC’s service as very good in 2009, down from 43% in 2008;
• 11% said their experience of dealing with HMRC was worse than a year ago versus 9% in the previous year;
• Only 4% agreed strongly with the statement that “HMRC resolves disagreements within an appropriate time period” versus 8% last year.