A new survey has found the United Kingdom to be top in the 'VAT-friendliness' league.
The investigation by KPMG International studied which countries people had the most difficulty with doing business in, from a
tax perspective.
Results showed the UK came out top, with ten per cent of respondents saying business transactions were easy. Italy was named most difficult to do business in.
Head of indirect
tax at KPMG in the UK, Gary Harley, said that the high scores for the UK are due to the tax authorities' "understanding" approach to dealing with VAT errors.
Mr Harley warned that a new stricter penalty regime, that will be applied to VAT returns from April next year, could change the ease with which people find doing business in the UK.
"Given the likelihood of increased penalties in the UK and the global concerns over VAT compliance, minimising the risk of VAT errors needs to be a priority for British businesses," added Mr Harley
According to a report in The Times, some of Britain's biggest companies paid little or no corporation
tax in Britain in 2007.
Research by the newspaper showed that three FTSE-100 companies paid zero corporation tax last year as they earned the bulk of profits overseas, allowing them to offset these against domestic tax liabilities.
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