Britain has the second-largest volume of tax law in the world, according to a report yesterday that showed the UK has been spared from being in the top 10 in terms of total tax burdens.
The UK has slipped one place to 12th in a survey of business tax rates, number of payments and time taken to comply with tax legislation.
This put it 10 places below the Irish Republic, which was the country with the lightest tax regime for any non-tax haven nation.
The report, by the accountants PwC and the World Bank, said tax law has run to 8,300 pages in the UK, six times France and second only to India. The number of pages has doubled over the last decade.
Caralee McLiesh, founder of the Doing Business project at the World Bank, said that complex rules made it easier for companies to avoid paying taxes, either accidentally or on purpose. "It is much harder to avoid tax when you have a flat tax as opposed to when you have more than 5,000 pages of tax law, as you in have the US and the UK," she said.
The Conservatives seized on the survey, saying that it showed Gordon Brown, the Chancellor, was "King of Complexity". George Osborne, the shadow Chancellor, said: "He has given Britain one of the most complex tax systems in the world. Individual taxpayers and companies have to shoulder the burden of the Chancellor's obsession with tinkering and interfering in the tax code."
However, Lord McKenzie, Labour's Treasury spokesman in the Lords and a former partner at PwC, said complexity affected only a small number of larger companies.
He added that a portion of tax legislation had been brought in to counter tax avoidance schemes devised by tax advisers such as PwC. "The survey does not take account of what the tax revenues are used for, such as spending that benefits businesses," he said.
In their report, Paying Taxes - the Global Picture, PwC and the World Bank attempted to calculate the burdens a small domestic company faced.
It said measures of business taxes included payroll taxes, stamp duties, local taxes and environmental levies as well as corporate income taxes, which only accounted for a third of the overall bill.
It then rated the number of payments that companies had to make each year and the time it took for businesses to process their tax forms
It found that apart from the Maldives, which has one property tax, the easiest industrial economy for businesses was the Irish Republic. It said its corporate tax rate was 25.8 per cent of pre-tax profits and it took up 76 hours' work for a typical small business entrepreneur, who had to make eight payments a year.
The British counterpart faces a tax rate of 35.4 per cent, 105 hours of work filling out forms but only seven payments to make.
The figures supported the warning made by Richard Lambert, the director general of the CBI, that multinational business were increasingly choosing Ireland over the UK as their European HQ.
Susan Symons, a senior client tax partner at PwC, said: "The evidence very clearly suggests that it would be short-sighted for the tax reform agenda just to focus on corporate income tax."Reuse content