Headline:
A Tax System, which costs £5.1bn
Description:
Business News: Dealing with tax 'costs £5.1bn'. By Dan Martin
The administrative burden of UK tax rules costs £5.1 billion, new government-commissioned research reveals.
The report by accountants KPMG, carried out on behalf of HM Revenue & Customs (HMRC), analysed the number of form filling duties imposed on businesses by the tax system.
It revealed that 2,692 obligations are required of firms costing a total £5.1 billion.
Some 85 obligations make up 86% of the cost.
HMRC said the remaining 2,607 affect only a small number of businesses although it acknowledged "collectively these can cause irritation and contribute to an impression that the tax system is complex and difficult to understand."
The report revealed that the biggest cost for businesses was finding the underlying data behind their accounting systems. Unsurpisingly, the biggest single tasks firms have to carry out was information gathering.
KPMG's report also revealed a wave of complaints from businesses about the service offered by HMRC.
Several bemoaned the lack of industry knowledge of the personnel dealing with them, while others said the department misunderstood the lead time a business needs to gear up to change.
KPMG's multi-million pound study forms a major part of the government's drive to address the burden of regulation continually complained about by businesses. A separate study by PricewaterhouseCoopers is still to be completed.
In his budget, chancellor Gordon Brown said the burden of dealing with HMRC's forms would be cut 10% over five years, with audits and inspections also reduced by the same percentage.
Financial secretary of the Treasury, John Healy MP, said: "HMRC will continue to work closely with business in future to further minimise administrative burdens."
The administrative burden of UK tax rules costs £5.1 billion, new government-commissioned research reveals.
The report by accountants KPMG, carried out on behalf of HM Revenue & Customs (HMRC), analysed the number of form filling duties imposed on businesses by the tax system.
It revealed that 2,692 obligations are required of firms costing a total £5.1 billion.
Some 85 obligations make up 86% of the cost.
HMRC said the remaining 2,607 affect only a small number of businesses although it acknowledged "collectively these can cause irritation and contribute to an impression that the tax system is complex and difficult to understand."
The report revealed that the biggest cost for businesses was finding the underlying data behind their accounting systems. Unsurpisingly, the biggest single tasks firms have to carry out was information gathering.
KPMG's report also revealed a wave of complaints from businesses about the service offered by HMRC.
Several bemoaned the lack of industry knowledge of the personnel dealing with them, while others said the department misunderstood the lead time a business needs to gear up to change.
KPMG's multi-million pound study forms a major part of the government's drive to address the burden of regulation continually complained about by businesses. A separate study by PricewaterhouseCoopers is still to be completed.
In his budget, chancellor Gordon Brown said the burden of dealing with HMRC's forms would be cut 10% over five years, with audits and inspections also reduced by the same percentage.
Financial secretary of the Treasury, John Healy MP, said: "HMRC will continue to work closely with business in future to further minimise administrative burdens."
Date:
12.04.2006
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