UK is favourite tax regime for big business Britain has leapt ahead of low-tax rivals such as Ireland, Luxembourg and Switzerland to become multinationals" favourite tax regime, according to a poll that George Osborne hailed as a "remarkable turnaround" in efforts to make the country more attractive to foreign investors. But the continuing debate over corporate tax avoidance is making business nervous, with 63 per cent of big companies polled by KPMG, professional services group, saying it had adversely affected UK tax competitiveness. The chancellor is trying to balance his push to increase Britain's tax competitiveness with political pressure to clamp down on corporate tax avoidance after recent controversies involving multinationals such as Starbucks and Amazon. Mr Osborne said the KPMG report showed that he was fulfilling his pledge to make Britain the most attractive corporate tax system in the G20."These companies can choose to invest and create jobs anywhere but are increasingly choosing Britain and showing that Britain can compete in the global race," he added. A dramatic cut in the corporate tax rate from 28 per cent in 2008 to 21 per cent next year, together with radical reforms of the way that foreign profits are taxed, drove the big leap in the UK's popularity. It overtook the Netherlands, its closest competitor, and Luxembourg in the survey in which Britain's largest businesses were asked to name which countries they thought most attractive from a tax perspective. The findings highlight the government's challenge in driving home its message that "Britain is open for business" at the same time as ratcheting up its rhetoric against tax avoidance. The Treasury has stressed that rule changes to curb profit-shifting to lower tax regimes need to be agreed internationally. The Dutch government has gone further in underlining its welcoming approach to international investors by telling the Dutch parliament that it regards shifting profits to lower-tax jurisdictions as an acceptable corporate tax-planning strategy. Only one FTSE 100 company said it was actively considering leaving the country. This is a marked change from five years ago when numerous companies were considering a move and 22 companies, including big names like WPP, the advertising group, left the UK. Fewer businesses are planning to move intellectual property and manufacturing functions, compared with a year ago. New rules allowing offshore finance subsidiaries to be taxed at a rate of just above 5 per cent were particularly popular, with more than two thirds of businesses expecting to take them up. The survey was based on interviews with 57 senior tax executives of companies drawn from the FTSE100, FTSE 250 and foreign-owned subsidiaries. But executives called for more reliefs on capital investment. They welcomed the removal of the 50p top income tax rate but most said it needed to be cut further. Three-quarters of businesses felt the patent box regime would not encourage their group to conduct more research and development and high value manufacturing activity in the UK. Six out of 10 executives said they favoured a voluntary code in response to pressure for greater transparency on tax. More than three-quarters of businesses say the attractiveness of a tax regime has at least some influence on where they locate. The main factors are low-tax rates, stability, simplicity and advanced warning of big changes.