New survey reveals flaws in tax system, says IoD

Dated: 22 November 2010

The Institute of Directors (IoD) today publishes the results of a survey of its members on the administrative burdens that the tax system imposes on them. The picture is much gloomier than that painted by last Friday’s World Bank survey, which placed the UK fourth for ease of paying taxes. The IoD argues for specific steps to improve the position.

Survey Results:

  • Many business people were clear about their tax obligations, but large numbers were not: 19 per cent for corporation tax, 15 per cent for employee taxes and 10 per cent for VAT. They expend time and nervous energy clarifying their obligations, before they can start to fulfil those obligations. Automation is helping, but that does not help people running SMEs who are not sure what they have to do.
  • Many Revenue officials were found to have a poor understanding of businesses. 37 per cent of respondents said that this was so.
  • 33 per cent of respondents found it difficult to get the information they needed from Revenue help-lines or from the Revenue website. There have been improvements, but more needs to be done.
  • There was a clear appetite among IoD members to change the rules of the tax system, in the direction of lower tax rates and fewer special reliefs. The most radical options, such as taxing businesses on their accounting profits, met with a very mixed response, but there was strong support for a good look at the taxation of employees, with over half of respondents wanting the Office of Tax Simplification to turn its attention to this topic.

Richard Baron, Head of Taxation at the IoD, commented:

“The administrative burden has been reduced over the past four years, but it is still too high. The Government needs to move ahead on all fronts: the rules of the tax system, the degree of automation and the helpfulness of officials.

“Above all, we need to see tough, numerical, and published targets for continuing improvement. HMRC’s Business Plan for the next five years did show a commitment to transparency, and outlined several helpful initiatives. But we must make sure that the Government uses its new attitude to long-term planning to give itself a suitably hard time.”

To read the full survey report, click here: Tax Report

ENDS

Contact Points

Edwin Morgan
Media Relations Manager
Institute of Directors, 116 Pall Mall, London SW1Y 5ED
Tel: +44 (0)20 7451 3392
Mob: +44 (0)7814 386 243
Email: edwin.morgan@iod.com
Website: www.iod.com/policy

Notes to editors

  • The IoD (Institute of Directors) was founded in 1903 and obtained a Royal Charter in 1906. The IoD is a non-party political organisation with upwards of 45,000 members in the United Kingdom and overseas. Membership includes directors from right across the business spectrum – from media to manufacturing, e-business to the public and voluntary sectors. Members include CEOs of large corporations as well as entrepreneurial directors of start-up companies.
  • The IoD offers a wide range of business services which include business centre facilities (including ten UK regional centres [three in London, Reading, Birmingham, Cardiff, Manchester, Nottingham, Edinburgh and Belfast] and one each in Paris and Brussels), conferences, networking events, virtual offices and hotdesking, issues-led guides and literature, as well as free access to business information and advisory services and a comprehensive Information Centre. The IoD places great emphasis on director development and has established a certified qualification for directors – Chartered Director – as well as running specific board-level and director-level training and individual career mentoring programmes.
  • In addition, the IoD provides an effective voice to represent the interests of its members to government and key opinion-formers at the highest levels. These include ministers, constituency MPs, Select Committee members and senior civil servants. IoD policies and views are actively promoted to the national, regional and trade media.
  • For further information, visit our website: www.iod.com
  • You can also keep up to date with the latest views from the IoD on twitter.com/The_IoD and at blogs.iod.com