Over 82% of respondents to the survey by the Institute of Charterered Accountants wanted to remain within the EU – 20% with further integration, 31% with a renegotiated relationship, and 32% with no change. Only 11% wanted to leave the EU.

The majority (65%) said that the EU offers benefits for their business, while nearly half indicated that those benefits were significant, affecting turnover, profitability and future growth prospects.

Only 3% of respondents said the EU imposes ‘significant’ burdens on their business, although 15% stated that membership resulted in ‘some’ burdens. There was a sense that the EU imposes more of a management and administrative burden as a result of rules and regulations.

Additional ICAS analysis on the impact of the UK leaving the UK suggests that the EU has a ‘very significant impact’ on the UK in the three taxation areas of VAT, customs duty and European tax cases.

The institute says VAT receipts for 2013/14 totalled £102bn and represented 21% of HMRC revenues, and argues ‘it is therefore inconceivable that VAT would be abolished given its contribution to the Treasury coffers’.

If the UK did leave the EU, it would have the power to extend and change the zero-rating of some supplies and the UK courts would not have to take the European Court cases into consideration.

ICAS says the downside for many businesses that operate across the current EU would be the additional compliance costs and complexity they would face in bringing goods into the UK. Its research indicates that currently, only 2% of business report ‘significant’ burdens or barriers as a result of EU VAT rules.

Outside the EU, the UK VAT system could start to diverge from the EU wide system and the broad consistency across the EU would be eroded, with ICAS giving the rules on place of supply of goods and services as examples of where there could be changes and where existing practices may well be overturned.

ICAS also says that leaving the EU would involve leaving the customs duty union, a move which it says would add a real cost to business, given that the UK imported goods worth £191.7bn from the EU in the 12 months to 30 September 2014 and exported goods worth £122.1bn in the same period.

There would be a significant impact both in terms of cash-flow and the administrative burden as the EU’s simplified procedures for imports and exports of goods would not apply.

The institute also points out that quitting the EU would mean taxpayers would lose the facility to take tax cases to the European Court of Justice (ECJ) to challenge HMRC, such as the Marks & Spencer group relief case. It says a range of ECJ cases have questioned some of the long-held procedures of the UK system and held them up to scrutiny, and in many cases have required the government to go back and redraft tax legislation to ensure it works as intended.

In addition, EU legislation has a very strong impact on accounting and corporate reporting and ICAS argues that as a single country, no longer part of the EU bloc, the UK’s ability to influence the development of IFRS could be adversely affected by withdrawal from the EU, while it is possible that the UK might wish to establish its own endorsement mechanism for IFRS. 

While the UK corporate reporting environment is generally viewed as highly-developed and often exceeds the minimum EU requirements, ICAS says UK withdrawal from the EU would allow the UK to loosen some of the EU requirements relating to auditor tendering and auditor rotation, although it says these have already promoted a change in culture which it could be difficult to reverse.

David Wood, ICAS executive director, technical policy said: ‘The level of support for staying in the EU was significant – although there were clear differences of opinion as to whether this should be in a more integrated EU, as part of a renegotiated relationship or with the status quo.

‘A striking message from the analysis paper prepared by our expert committees was that even if the UK left the EU, it would be severely restricted in its ability to do things differently if it wanted to continue to access the EU’s single market and be internationally competitive.’

In January 2013, Prime Minister David Cameron promised an "in/out" referendum on British membership of the EU in 2017, after a period of renegotiation with the EU, if the Conservative party won an outright majority at the next general election.

ICAS survey of the impact of the EU on British business and its analysis of the impact if Britain withdrew are here: http://icas.org.uk/Technical-Knowledge/Britain-and-the-EU/?utm_source=Informz&utm_medium=email&utm_campaign=mailings