The UK has the second most effective tax system in the G20, but has dropped down to number 23 in the global rankings, according to a study by PwC and the World Bank Group
The annual ‘Paying Taxes’ report, now in its 13th year, shows the UK falling behind Canada but staying ahead of South Korea and Australia.
The report ranks 190 countries on the ease of paying taxes for a medium sized domestic business. It looks at the overall tax rate and the time spent preparing, filing and paying taxes.
The report also assesses how long it takes dealing with tax authorities once tax returns have been filed, a methodology which has been refined this year. With this update, the UK dropped from 10th to 23rd in the overall global ranking. On a like for like comparison the UK falls one place.
Kevin Nicholson, head of tax at PwC, said: ‘It’s encouraging the UK retains its position as having one of the most effective tax systems in the G7 and G20 but there is still plenty of room for improvement.
‘Competitiveness is not just about tax rates but the compliance burden. More resource for HMRC so it can deal with tax queries more quickly could make a big difference. There is a clear correlation between reducing tax compliance and higher productivity.’
Like last year, it takes a medium sized company 14 working days (110 hours) to prepare, file and pay and its corporation, labour and value added taxes.
The research shows the Middle East retains the most simple tax system, with Qatar and the UAE sitting joint first in the table.
The report finds that the use by business and government of technology in tax compliance has driven continued simplification and reduction in the burden of tax compliance on businesses globally.
The number of tax payments made has fallen by around one payment for the second year in a row, driven largely by increased online filing and payments capabilities, new web portals and the greater use by taxpayers of online systems.
Reporty by Pat Sweet
