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Despite debate UK tax regime remains attractive for business: KPMG

Britain maintains its ranking as most attractive tax regime for businesses but gap with rival jurisdictions such as Luxembourg and Ireland is narrowing, according to a survey by KPMG UK.

Sixty five percent of the 102 senior tax decision makers from large UK public listed companies who participated in KPMG Annual Survey of Tax Competitiveness 2013 identified the UK as the most attractive tax regime ahead of Luxembourg (63%), Ireland (62%) and Switzerland (61%).

According to the survey, only 5% of UK companies are actively considering moving to another jurisdiction. This is the lowest percentage since 2007.

KPMG UK head of tax Jane McCormick said: "Our research shows that the efforts that the current and previous governments have made to address anomalies and improve the attractiveness of the UK to business from a tax perspective are bearing fruit."

Nevertheless UK businesses fear that the current debate on tax avoidance will have a negative impact on foreign investments. Sixty seven percent of the UK listed companies and 88% of FTSE 100 decision makers surveyed believe that the debate is likely to reduce investment in the UK.

On the other hand only 10% of foreign owned subsidiaries said they were considering reducing investment due to the tone of the debate and 80% of them said it had no effect.

However with an increasing public scrutiny businesses have endorsed the necessity to be transparent and 75% of tax executives questioned support the general aims of the OECD's action plan to tackle Base Erosion and Profit Shifting (BEPS).

KPMG UK head of tax policy Chris Morgan said: "The challenge for policy makers now is to stick to their guns on their commitment to making the UK the most attractive tax regime in the G20 and the challenge for businesses is to continue to play their part in driving the UK's recovery, creating jobs, making investments and stimulating economic activity."

Related link:

KPMG Annual Survey of Tax Competitiveness 2013

 

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