Brexit: UK should cuts taxes to remain competitive says accountancy firm
Accountancy group UHY Hacker Young has called for the UK to slash its tax rates to boost competitiveness post-Brexit.
Research by the accountancy group suggested that the UK’s tax burden is 76 per cent higher than that of the major emerging economies.
The UK has a tax burden of 38 per cent of GDP, compared to an average of 21.8 per cent for the so-called BRIC economies (Brazil, Russia, India and China).
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The UK’s tax take is also 36 per cent higher than the global average of 28.2 per cent, the research showed.
UHY tax partner Darren Grimes said: “Lowering the high burden of taxation could act as a competitive differentiator for the UK post-Brexit.
“A lower tax burden could increase the UK’s attractiveness to foreign-based businesses on the global stage compared to other developed nations.”
UHY examined 35 countries across the world and calculated what percentage of that country’s GDP is taken by the government in tax.
The research found that European countries, on average, have a tax burden of 43.3 per cent, with the average of the G7 club of developed nations at 31.1 per cent.
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Emerging economies such as Malaysia and the Philippines, with tax takes of 16.5 per cent and 13.9 per cent, have significantly lower rates of tax take than those of more developed nations.
Grimes said: “Developed economies like the UK need to investigate ways of lowering the tax burden for businesses or they may find increasing competition from more dynamic emerging countries.
“Lower personal and business taxes can help economies spur growth and create incentives, particularly for investors and larger, more globally-focused businesses.”
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However, speaking in July 2017 Chancellor Philip Hammond said the UK had no plans to slash taxes and red tape post-Brexit.
Speaking to French newspaper Le Monde, Hammond said Britain would remain “recognisably European” after Brexit and would not undermine competing continental economies to attract global business.