MORE than two thirds of UK’s corporate sector is unclear about the distinction between legitimate tax planning and tax avoidance.

A research, conducted by BDO, a UK-based professional accountancy firm with an active role in public policy, found that in a survey of 269 UK companies, more than 60 per cent were unclear about tax planning and avoidance. More than 30 per cent of the companies felt that the tax authority, HM Revenue and Customs, treated them guilty until proven innocent while 65 per cent of the companies thought that it was more burdensome to deal with HMRC than five years ago. While some companies felt that HMRC possessed inadequate or poor commercial knowledge, nearly all the companies believed that it would be easier to deal with HMRC if tax rules were made simpler. Incidentally, the UK has the second largest number of pages of tax law in the world, second only to India.

According to the BDO spokesperson, both HMRC and UK businesses would save time, resources and money if the current tax framework was both clarified and appropriately enforced.

According to HMRC spokesperson, HMRC protected tax revenues and supported businesses that were open and honest. Large businesses were therefore provided with an HMRC customer relationship manager who was available to clarify the tax implications of business transactions.