High-tax Britain slides even further down competitiveness rankings
High-tax Britain slides even further down competitive rankings – with tax burden on course to hit the highest level since World War 2
- Study sees UK falling to 30 among 38 OECD states in tax competitiveness
- Tax Foundation report sees UK free-fall in corporate tax competitiveness ranking
- Chancellor Jeremy Hunt has indicated Autumn Statement tax relief is unlikely
Britain has slid down a global ranking of tax competitiveness after raising the corporation levy from 19 per cent to 25 per cent earlier this year.
An annual study published by America’s Tax Foundation yesterday showed the UK falling by three places to 30th among the 38 countries in the OECD.
The most notable fall was in its ranking on corporate taxes, where it fell by 17 places to 28th. It is the latest troubling evidence of the increasing UK tax burden – on course to hit the highest level since the Second World War – and shows that the world is taking notice.
Household earnings are also being targeted, with separate analysis by the IFS think-tank showing that a freeze in income tax bands – effectively a stealth tax – will raise £52billion, equivalent to 6p on income tax.
Chancellor Jeremy Hunt has indicated there is little chance of relief at next month’s Autumn Statement, when he will face forecasts likely to show a worsening picture for the public finances. Last year, the International Tax Competitiveness Index judged the then-corporation tax rate – 19 per cent, below the OECD average – as one of Britain’s strengths.
Chancellor Jeremy Hunt (pictured March 2023) has indicated there is little chance of relief at next month’s Autumn Statement
Britain’s overall tax competitiveness ranking is below that of larger economies such as Germany and the US (pictured: Hunt in November 2022)
Its latest assessment praises the ‘full expensing’ scheme that provides relief for investment in machinery, but the measure is due to expire in three years.
The report also highlights high taxes on dividends as well as property.
Britain’s overall tax competitiveness ranking is below that of larger economies such as Germany and the US. Its slide down the table will come as little surprise in UK boardrooms after bosses railed against the the corporation tax increase.
The Tax Foundation is a US think-tank with the goal of ‘a world where the tax code doesn’t stand in the way of success’. Its report said: ‘If a country’s tax rate is too high, it will drive investment elsewhere.’
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