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More than two-thirds of private businesses believe the UK tax regime does not favour enterprise, according to a new survey by PricewaterhouseCoopers (PwC).
Despite the government introducing a number of policies intended to support enterprise and innovation, the majority of private firms believe the tax system is failing them.
Recently introduced measures aimed at small and medium-sized operations, such as increased relief for research and development, will have no impact, claimed 60% of businesses questioned by PwC for its fourth Enterprising UK survey.
The same will be the case for grant funding for apprenticeships, the extension of the small business rate-relief holiday, and reforms to Enterprise Investment Schemes (EIS) and Venture Capital Trusts (VCTs), said an average of 63% of respondents form broad range of industries and in a variety of stages of growth.
Broader tax changes also came in for much criticism, with the most ire targeted at the increased rate of National Insurance contributions: 91% of private firms report a negative impact on their business. The 20% VAT and the 50% rate of income tax have also led to detrimental consequences.
PwC’s head of private business, Ruby Parmar, remarked, ‘Certain measures designed to support business endeavour are not having their intended effect or, at least, are not being appreciated across the private business sector.
‘More needs to be done to publicise such incentives and ensure they're easy to access, but firms also want changes that make their everyday lives easier.’
Ms Parmar’s colleague, tax partner Mary Monfries, added, ‘Private businesses are not naive. Those that have survived a tremendously tough few years are strong, ambitious and focused on the longer term.
‘Of course, the picture varies across sectors and regions of UK. The construction industry has suffered particularly and is the least confident sector we surveyed. Businesses in Scotland and Northern Ireland were also less optimistic, although markedly brighter than they were two years ago,’ said Ms Monfries.
