Committee Report Counts The Cost Of Tax Compliance For UK Firms

Robert Lee, Tax-News.com, London

08 June 2004

A report released last week by a parliamentary committee has urged the UK government to set limits in order to check the growing cost to business of complying with tax laws.

The report by the Treasury Committee exposed the fact that the government does not have an accurate way of measuring the cost of a growing list of new statutory requirements which place ever more demands on businesses through the PAYE system, such as the allocating of tax credits and the collection of student loans.

“There is overwhelming evidence that the burden on businesses has increased, and that they are expected to do more and more for the Inland Revenue," commented the Conservative chairman of the committee, Michael Fallon.

In particular, he pointed to concerns being voiced by businesses over the steady flow of new payroll requirements that have been introduced over the last few years.

"In addition to PAYE, employers are now potentially responsible for three types of National Insurance contributions, payment of tax credits, collection of student loans, four statutory payments, the Construction Industry Scheme tax, and monitoring national minimum wage compliance,” noted Mr Fallon.

“It is quite a list” he observed, adding that the exact cost to the business community is unknown.

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