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03 Oct 2011
THE UK has the second lowest corporate tax burdens in the G8, research has shown.
A study by UHY Hacker Young, released today, shows that only Russia imposes lighter corporation tax on businesses. It also has the lowest business tax burden among the major European economies, with only Estonia, Romania, Ireland and occasionally the Netherlands imposing lower rates.
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The research looked at how much tax is paid by businesses with pre-tax profits of $100,000, $1m and $100m. The UK had the 16th highest burden out of 21 countries for $100,000 profit, 14th for $1m profit and 12th for $100m profit.
Roy Maugham, tax partner at UHY Hacker Young, said: "The perception that the UK is a high tax jurisdiction for business is now something of a myth. There has been a lot of discussion about UK-resident businesses moving overseas - and this has happened - but the reality is that the UK is a considerably more welcoming business environment than most other major economies.
"The UK now has a competitive advantage which most businesses would like the Government to build on further."
It was surprising that the US and Japan impose higher corporate taxes on many businesses than France and Germany, which are traditionally seen as high tax economies, he added.
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Visitor comments Add your comment
UHY's work is fatally flawed
I'm afraid that, with such a strident title, UHY's work can only hope to disappoint. Their work doesn't prove that the UK is a low tax regime. This is because they've made a number of errors:
(1) They show what they claim is the tax payable on statutory profits of $100k/$1m/$100m but they've in fact calculated the tax payable on taxable profits of those levels. That means they haven't taken account of the breadth of each country's tax base.
(2) They should consider the global context of taxation and difficult issues such as controlled foreign companies.
(3) They focus on corporation tax only, whereas companies complain about the overall regulatory landscape, including not just CT but national insurance, VAT, admin burdens, etc.
I've written about this (and more) a href="http://bit.ly/ou6jLk" on my blog /a .
Posted by: Christie Malry, 03 Oct 2011 | 20:08
Scotland
The UK has the second lowest corporate tax burdens in the G8; only Russia imposes less?
Headline rates of tax can be enormously deceptive, by ignoring allowances.
The Scottish government will be grateful for this study. For a flavour of the debate over Scotland's constitutional future, see 'Holyrood's challenge to business' at http://www.bbc.co.uk/news/uk-scotland-scotland-politics-15122749
Posted by: slightly optimistic, 05 Oct 2011 | 11:40