According to new research commissioned by HM Revenue & Customs, one in five large British businesses has considered relocating abroad for tax reasons.

The research, conducted by TNS-BMRB, also showed that 64 percent of large companies felt the red-tape burden had increased over the last 12 months. The report indicated that businesses thought HMRC was becoming less transparent in its decision making and 30 percent of large businesses said the tax system was administered had a negative impact on UK competitiveness.

Commissioned by the HMRC under the previous Labour Government, the results are reflective of feelings towards the tax regime at that time. Since the Coalition came into power, one of George Osborne’s resounding messages has been that ‘Britain is open for business’ – this is in direct response to fears that a complex and prohibitive tax system will hamper Britain’s competitive position and economic growth.

A spokesman for the Treasury said this week: “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.”

Earlier this month the Government announced that from September 1, there would be a one-in one-out system for new regulations which impose costs on business.