UK now number 10 in the Paying Taxes ranking
17 November 2016
Having worked with the World Bank on the Paying Taxes study (part of the Bank’s Doing Business project) since its inception over ten years ago, it has been interesting to see the UK do relatively well and to improve its position from 2012 when its ranking was 18. The study ranks a country's tax system based on how easy it is to comply with it (both pre and post-filing), and the tax cost, using a case study company. Governments around the world have been keen to improve their position in this ranking. This year the UK has finally made it into the top 10, reflecting the ongoing process of corporate tax reform that government has embarked on in recent years. This year the study reflects the next stage in the cut in corporation tax rates, and it also recognises that the compliance processes both up to the point of filing tax returns and also dealing with some specific post filing processes (to secure a VAT refund and to make a correction to a corporation tax return) compare quite well with other countries around the world.
The Paying Taxes result, along with the UK’s position in the overall World Bank Doing Business ranking (7th) are a helpful indication that the UK is open for business, but the challenge is to make sure that the country stays there. The study shows that countries around the world continue to reform and improve their tax systems with the global averages for the three original indicators (Total Tax Rate, number of tax payments, and time to comply) continuing to improve. We need to keep a careful eye on how the proposals for devolution take shape and the potential for taxes at different levels of government adding to complexity. And while the expectation is that introducing new technology should make paying taxes easier and tax collection more efficient, ensuring that any new technology is well tested before it goes live and that the business community is happy to embrace it fully, will be important. The study is good news for the UK, but there is much still to do to ensure it remains in a good position. Maintaining trust in the system, and securing the support of business and the public will be critical. Read the full report here.