Call to chancellor as survey reveals increased tax burden

EEF, the manufacturers’ organisation believes this should be set as part of a wider, medium term strategy to address the deterioration in the UK’s tax competitiveness. It backed its call with a survey of companies’ views on the current UK tax system and its impact on their businesses. The results provided evidence of the increased tax burden companies are now facing, especially amongst small and medium size businesses. EEF chairman, Martin Temple, says: “Currently the government’s strategy for business taxation is muddled, with repeated changes and new measures which have sometimes been reversed rapidly. Business also feels that its priorities for competitiveness, simplicity and predictability are being presented as trade offs. “As other countries move to improve the competitiveness of their tax systems, manufacturers believe that the UK is heading in the wrong direction. If government is to recover the confidence of business and investors, it needs to set out a more coherent strategy of how it will deliver a more competitive business tax regime.” According to the survey of 285 companies, 54% of companies said that their tax burden had risen in the last five years, with one in eight describing the increase as significant. Furthermore, smaller companies with between one and fifty employees were more likely to say that their tax burden had risen. And, given the competitive environment, almost 90% of companies reported little or no ability to pass on the cost of tax rises. The report also found that business needs a simpler tax system. As a result of over 200 changes to the tax system since the 1997 Budget, almost 75% of firms thought either the volume of new legislation or, the frequency of changes, were to blame for complexity in the tax system. Consequently, almost half of the firms said that the number of personnel and time required to deal with tax matters has risen.