29/11/2011

The UK tax system is driving business abroad, according to the Institute of Directors (IoD), who claimed that the British Government is not going enough to make it truly competitive on the world state.

The IoD's latest report on the competitiveness of the UK tax system has pointed out that the increasingly beneficial tax regimes - of places as close as Ireland and as far away as Hong Kong and the British Virgin Islands - are attracting significant numbers of British business registrations.

Director General of the IoD, Simon Walker, said that the UK tax regime was risking the nation's status as a global business destination, labelling it "uninviting".

"The UK should be the country of choice for international capital, and a place where the tax system is not so burdensome as to tilt the balance against enterprise and hard work," he said. "It places the UK in the middle of the pack of developed countries, not out in front. We want to see a radical programme of business tax reductions for the coming decade, in order to remedy that."

The IoD said that the UK ranked in the middle of the 34 OECD countries when measured on the total tax burden, as well as when measured on its corporation tax rate. The institute said that the lowering of the corporation tax rate to 23 per cent by 2014 will go some way to improving that status, but that bringing it down to 15 per cent by 2020 could push it out to the front of the international pack.