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Tax system prompted firms to ponder moving abroad

A report compiled on behalf of HM Revenue and Customs (HMRC) found that one in five larger companies looked at re-locating abroad because of the UK's tax system.

The study was conducted by TNS-BMRB, the public policy research organisation.

It also revealed that 64 per cent of large firms believe that the burden of business red tape has increased over the past year.

Almost a third of large businesses thought that HMRC's management of the tax system hampered the competitiveness of the UK economy.

A spokesman for the Treasury said: "The Chancellor has said he wants Britain to be open for business and for the private sector to drive the UK's economic recovery.

"That is why the June Budget announced a cut in corporation tax for a million businesses, a national insurance holiday for start-ups and a new office of tax simplification to make the UK a more attractive and simpler place to do business."