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Tax incentives must be simplified in order to encourage enterprise and assist small businesses in their tax planning, according to a survey by PricewaterhouseCoopers (PwC).
Almost half of all private companies believe that the UK tax policy pertaining to businesses in particular should be made less complicated in order to lighten the administrative burden.
The survey found that although awareness of tax incentives has increased from 41 per cent to 56 per cent, this has not corresponded to the amount of enterprises taking advantage of the incentives that are available to them.
Only 14 per cent of respondents have taken up the tax incentives which they are entitled to – a figure that had increased by a mere three per cent.
The survey also found that by and large, tax mitigation and incentives do not appear to be effective in influencing behaviour. Research and Development tax credits and capital allowances on energy saving technologies were the least effective and influenced behaviour in only 21 per cent and 23 per cent of cases respectively.
An overwhelming 90 per cent of small businesses said they needed an effective voice representing their interests within HM Revenue and Customs and the Treasury.
Kevin Nicholson, PwCs UK head of entrepreneurs and private companies said: "It is the job of tax advisers, business and government to work together to identify practical solutions to make the tax system work for UK enterprise."
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