Tax avoidance survey

More than a third of the UK’s top business people say they make use of tax planning measures to ensure their organisation’s tax bill is minimised, according to research by YouGov say Harris & Co accountants Northampton

A poll of over 100 individuals in leading UK businesses and more than 500 SME business decision makers and members of the general public on their attitudes to corporate tax found that the business elite (34%) are almost twice as likely as SMEs (18%) to take advantage of tax planning to reduce the amount of tax they pay.

However, YouGov’s survey suggests that the recent high-profile coverage of large organisations’ approach to tax management may be having an impact on company behaviour. The study found that fewer (24%, down from 34%) believe their organisations will be looking to minimise tax in five years’ time. However, for SMEs this situation is reversed, with more (21%, up from 18%) saying they will use tax planning in the future.

YouGov found high levels of public scepticism and over-estimation in the way most large UK-based companies pay their taxes. Almost two thirds (64%) of British adults believe large UK companies take advantage of legal tax planning measures to ensure their tax bill is minimised. This is compared to the almost one in five (19%) that think these businesses comply with the spirit and letter of the law and the 5% who believe large organisations take views of wider stakeholders into account when determining what tax to pay and where to pay it.

The research suggests that the public have a slightly more positive view of how large companies will handle their tax affairs in the future. There is a drop in those who think they will take advantage of tax planning, down to 57%, while more (21%) believe big organisations will comply with the spirit and letter of the law in five years’ time. There is little change (6%) in those who reckon they will take the views of wider stakeholders into account.

Oliver Rowe, director of reputation research at YouGov, said:

‘Our findings show that with so many leading business people believing their organisations will no longer take advantage of tax planning over the next five years, they either expect rules to be tightened or the potential for reputational damage to be too high. However, SMEs are not moving in the same direction. Possibly they think tax changes won’t affect them or they feel the opportunity to keep more money in the business outweighs the likelihood of suffering reputational damage.’