UK private businesses want a stable tax regime that supports and encourages growth

• Two thirds don’t believe the UK’s tax regime supports and encourages enterprise

• Less than 20% agree that government actions the concerns of private businesses

Only a third (33%) of private business owners surveyed believe that the UK’s tax regime supports and encourages enterprise, despite the wide range of tax reliefs available and measures introduced in the 2009 Budget, an Enterprising UK 2009 survey by PricewaterhouseCoopers LLP has found.

A resounding 84% of private business leaders agree that a more effective voice within government would pave the way forward, supporting UK enterprise for the future.

Despite these concerns, almost all (99%) are seizing opportunities to support themselves through the recession, with 50% confirming that they have updated their respective strategic plans within the last three months.

Simplicity and stability of the UK’s tax system was top-of-mind, with a call for a reduction in uncertainty and the rate of change, up from 8% of respondents in 2006 to 17% in 2007 to reach 25% today.

Mary Monfries, head of UK private business, PricewaterhouseCoopers LLP, said:

“Private business is calling for a stable, certain tax environment in which to conduct their business successfully. Reducing tax rates would be a challenge in the current economic climate, but a reduction in the rate of change and uncertainty should be easier to deliver.

“Private businesses are not looking for a crutch from government – an overwhelming majority are taking active steps to help themselves in managing through the recession. However, they do want a more effective voice.”

Tax relief?

The findings show a mixed picture in awareness levels of the different tax reliefs available to UK private businesses and in some instances this awareness has declined since the survey was last published in 2007. Tax relief usage levels remain relatively low, although it needs to be remembered that a number of reliefs are targeted at specific problems so would not be expected to be relevant across a broad population.

The highest awareness levels of the 12 named schemes in the survey, known to more than eight in ten companies, were R&D tax credits, tax deductions for employee share scheme rewards and first year allowances for the acquisition of capital assets.

Environmental relief has a seen an increase in both awareness, up five percentage points to 67% (from 62% in 2007) and usage, rising six percentage points to 17% (from 11% in 2007). This demonstrates that private businesses in the UK are taking their role in environmental issues seriously, incorporating measures into their strategy.

Private business owners were candid in their attitude towards paying taxes, agreeing that it is their duty to pay their fair share of tax, but like any other cost to the business, will seek to reduce the size of the bill.

via PricewaterhouseCoopers.

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