Red tape burden taxing for UK firms
Tuesday 11 April 2006
The administration burden of UK tax regulation is costing more than £5 billion a year, according to a research report by KPMG.
Undertaken on behalf of Her Majesty’s Revenue and Customs (HMRC), the research found that 85 form-filling obligations account for 86% of the total costs, yet there are a further 2,600 forms that account for the remainder.
More than 40% of the total cost is incurred by businesses becoming compliant, 49% represents the cost of working with intermediaries and 9% represents the acquisition or non-time costs.
However, the good news is the research shows UK businesses fare better than their counterparts in the Netherlands and Denmark that have the same tax methodology.
As announced in the Budget and on the back of the research, HMRC plan to reduce the burden on businesses of dealing with forms and returns, along with audits and inspections, by at least 15% over the next five years.
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