Business tax system needs to be simplified

New research from PriceWaterhouseCoopers shows that, although awareness levels of business tax reliefs and incentives have increased in recent years, the need for simplification of the tax system is very real.

The survey of 423 private companies shows that two thirds more companies than last year believe the UK tax system supports and encourages enterprise. The figure remains fairly low, but went up from 21% to 35%.

Just under half of all those surveyed wanted a simpler UK business tax system - particularly in the areas of compliance and administration.

Kevin Nicholson, UK head of entrepreneurs and private companies, PricewaterhouseCoopers LLP, told us:

“It is promising to see a more positive view coming from UK privately-owned companies. However, these messages must be balanced against findings that suggest there is still a negative perception of the UK tax system, and its support for enterprise, and that significant improvements are needed. This must be addressed if we are to create a true enterprise economy.”

The survey, of 423 privately-owned companies, demonstrates that the UK private business sector wants simplification. But companies seem confused as to how best to do this.

Few offered concrete suggestions about how to simplify the tax system. One suggestion, which seven in ten respondents agreed to, was paying corporation tax calculated by reference to accounting profit.