TaxCorporate TaxOver-taxed UK ‘risks falling behind’, claims UHY Hacker Young

Over-taxed UK 'risks falling behind’, claims UHY Hacker Young

Britain pays a third of GDP in taxes, UHY Hacker Young report finds

Over-taxed UK ‘risks falling behind’, claims UHY Hacker Young

THE BRITISH ECONOMY is over-taxed, with a tax burden 18% higher than the global average, according to research published today by Top 50 firm UHY Hacker Young.

The relatively high effective rate of a third of GDP (32.9%) runs the risk of impeding growth, the report found. The global average stands at 27.8% of GDP, with the UK comparing poorly to other developed economies including the US at 25.4% and Ireland at 28.3%. Japan stands ahead of the UK at 29.5%.

The UK does, however, have the beating of most of its European neighbours, where around 40% of the economy is given over to government.

UHY Hacker Young warned high tax takes can prove a disincentive to investors, hitting wealth-creation and encouraging large firms to gravitate towards lower tax bases elsewhere.

UHY Hacker Young tax partner Roy Maugham said that unless the UK addresses its “weighty” tax burden, the British economy could find itself under pressure from both lower tax Eastern European countries that are able to offer equally strong manufacturing skills bases and global cities like Singapore, Dubai and Qatar, which are “consciously targeting the industries that create the most wealth”.

He said: “While our tax burden compares favourably with some of our Western European neighbours, increasingly, that is not where the most intense competition is coming from. It needs to be a clear ambition to make our economy globally competitive by keeping a close eye on the overall tax take – perhaps even setting a specific target.”

“That will need to be balanced by greater efforts to ensure that spending on the public sector delivers the best results for its customers.”

“How much tax is too much ought to be discussed much more openly during the election campaign.”

Related Articles

More austerity as Treasury faces £20bn black hole

Corporate Tax More austerity as Treasury faces £20bn black hole

4y Calum Fuller, Reporter
Budget 2013: Dour or defining? Or both?

Corporate Tax Budget 2013: Dour or defining? Or both?

5y Calum Fuller, Reporter
Barnier pushes for European transaction tax

Corporate Tax Barnier pushes for European transaction tax

6y Rachael Singh, Writer
A growth Budget overshadowed by disappointing growth

Administration A growth Budget overshadowed by disappointing growth

7y Gavin Hinks, Writer
Budget2011: Recovery slower than 80s and 90s

Administration Budget2011: Recovery slower than 80s and 90s

7y Gavin Hinks, Writer
IMF and directors call for tax cuts

Corporate Tax IMF and directors call for tax cuts

6y Jaimie Kaffash, Writer
Tax 'one of many deterrents' to UK investment

Corporate Tax Tax 'one of many deterrents' to UK investment

7y Rose Orlik
Blog: A 'growth' Budget overshadowed by disappointing... growth

Administration Blog: A 'growth' Budget overshadowed by disappointing... growth

7y Gavin Hinks, Writer