Research conducted by the British Chambers of Commerce (BCC) reveals the business community believes the tax system is “fundamentally unfair,” and called for more support.
The BCC conducted an online survey of more than 1,000 UK firms between 28 January and 11 February, with 96% of participants identifying as SMEs.
And it highlighted the majority of respondents from the business community (58%) feel the UK tax system is unfair to organisations like theirs, signalling concerns about how HMRC applies its tax rules to different types of firms.
More than two thirds of respondents say that they don’t feel HMRC applies tax rules fairly across the board, regardless of size of business; of the respondents who felt this way, 70% are micro-businesses, and 59% are medium and large enterprises.
The business community also commented on concerns surrounding the quality of service provided by HMRC, with 49% of respondents saying they don’t get the support needed to be compliant.
As a result of this feeling about the fairness or otherwise of the UK tax system, the BCC is calling on the government to make improvements on HMRC’s service to business by matching the level of investment in tax avoidance with funding for support and advice for businesses.
The recent introduction of Making Tax Digital and changes to auto-enrolment, in addition to other upfront business taxes and costs are adding to the administrative burdens on firms, and therefore reinforcing concerns over the current tax regime.
Suren Thiru, Head of Economics at the BCC, said: “These results reflect a strong impression among businesses that the current UK tax regime isn’t a level playing field.
“HMRC must step up efforts to provide better support to smaller businesses to get their tax right, rather than simply pursuing and enforcing penalties.
“This should include matching investment in frontline HMRC help towards SMEs, with their work on non-compliance and tax evasion.
“More also needs to be done to address the escalating burden of upfront costs and taxes to provide firms with much needed headroom to get on and invest, train their staff and compete on the global stage.”