Cross-border tax complexities cost the UK economy £47.6bn in lost revenue last year, an average revenue loss of 16 per cent on total EU exports, according to fresh industry data shared with City A.M. this morning.
The stresses of navigating complex regulations post-Brexit continues to hold back growth for UK exporters, and is causing significant anxiety for business leaders, according to tax compliance technology company Avalara, analysing recent data from the Centre for Economics and Business Research (CEBR).
Complexity
As the economy works to recover post-pandemic, many UK businesses remain optimistic for future European growth opportunities, with nearly three quarters (72 per cent) of respondents stating they have plans to expand to at least one more EU market.
Yet, in practice, the weight of compliance burdens and the realities of sweeping EU tax reforms on sales from outside the bloc appear to be impacting these plans.
Just under a third (32 per cent) of respondents currently exporting to the EU are planning to exit at least one market, and 3 in 5 (62 per cent) of businesses revealed that the fear of being fined for tax compliance has recently caused them to reverse plans to sell goods in a European country.
With little set to change in terms of the levels of tax compliance obligations on UK exporters, the research predicts that the investment loss due to cross-border tax complexity is expected to result in a further £16.1bn of value lost to the UK by 2026.