A total tax rate of 35.5 per cent is well below the 49.7 per cent average across the G20, and helps make the UK the best nation in Europe for startups, Ernst and Young’s G20 entrepreneurship barometer says.
Despite worries over bank lending, the report also found firms in the UK have relatively good access to funding. Britain ranks second only to the US with strong financing from sources including venture capital and initial public offerings.
But despite placing above Germany, France and the EU on the rankings for entrepreneurial culture, the UK also fell behind the US, South Korea, Japan and Australia.
Just 57.8 per cent of Brits enrol in tertiary education, well below the 76 per cent in Australia and 89.8 per cent in the US, holding back productivity. In education it also ranks below France and the EU.
And the UK has a weak tradition of mentoring and supporting entrepreneurs, the report found.
“The foundations for a strong entrepreneurial ecosystem are already well established in the UK, with fast growth businesses accounting for nearly 60 per cent of all new jobs,” said Ernst and Young’s Stuart Watson.
“But we shouldn’t be complacent and can’t rely purely on the government. Domestic demand is set to remain fragile for some time yet, uncertainty still hangs over the Eurozone, while emerging markets are catching us up. The government and firms need to work closely to maintain a competitive financial and regulatory environment and develop an entrepreneurial culture.”