Taxation and Red Tape: The Cost to British Business of Complying with the UK Tax System

89 Pages Posted: 1 Jul 2010

See all articles by Francis Chittenden

Francis Chittenden

University of Manchester - Manchester Business School

Hilary Foster

University of Manchester - Manchester Business School

Brian Sloan

Manchester Business School

Date Written: February 17, 2010

Abstract

Successive governments have promised to reduce business red tape, whilst doing nothing about it. In fact, with regard to the tax system, ever-greater numbers of taxes and ever-greater complexity have increased burdens on businesses by turning firms into unpaid tax collectors.

Research into the costs of regulation is notoriously difficult. However, this study brings together the best work on the burden of tax compliance and administration and adds important new insights. In particular, this monograph shows the severely regressive nature of the costs of complying with the UK tax system - small firms suffer far more than large firms from the imposition of government bureaucracy related to tax collection.

The costs of complying with the tax system are higher in the UK than in many other countries. The authors show that this should not be the case, and propose ways of reducing the burden of tax bureaucracy. These include radical reforms, not just to the administration of the tax system, but also to the nature of the system itself.

Keywords: HMRC, Firm Size, Regulation, Tax Compliance Costs, UK Tax System, Tax Code

JEL Classification: H2, H21, H25, H29, H34, K34

Suggested Citation

Chittenden, Francis and Foster, Hilary and Sloan, Brian, Taxation and Red Tape: The Cost to British Business of Complying with the UK Tax System (February 17, 2010). Institute of Economic Affairs Monograph No. 64. Available at SSRN: https://ssrn.com/abstract=1632951 or http://dx.doi.org/10.2139/ssrn.1632951

Francis Chittenden (Contact Author)

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Hilary Foster

University of Manchester - Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

Brian Sloan

Manchester Business School ( email )

Booth Street West
Manchester, M15 6PB
United Kingdom

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