Businesses in the United Kingdom have faced a £3.3 billion administrative burden over the past year due to more than 140 tax policy changes introduced by the government, according to an analysis by Ryan, a global business tax consultancy. The study found that these frequent changes have increased compliance costs for companies by 21 percent, adding to the £15.4 billion that firms already spend annually on tax-related administration, as estimated by HM Revenue & Customs (HMRC).

The surge in compliance expenses comes amid efforts by Chancellor John Healey to reduce regulatory burdens and support business growth. Ahead of his first Budget, Healey acknowledged widespread frustration among British firms over excessive paperwork and promised to eliminate the requirement for small companies to file full accounts with Companies House, aligning with the government’s broader aim to reduce regulation by 25 percent during the current parliamentary term.

Despite these intentions, the proliferation of tax policy modifications appears to be counteracting efforts to ease business operations. For example, a temporary reduction in VAT from 20 percent to 5 percent on family attractions and children’s meals, introduced under former Chancellor Rachel Reeves over the summer, resulted in an estimated £26 million in additional compliance costs for the restaurant sector. Companies had to invest resources to determine eligibility and recalibrate pricing structures accordingly.

Corporate tax reforms were identified as the leading driver of increased administrative costs, accounting for approximately £713 million of the total. This category included adjustments to capital allowances, which influence how businesses deduct investments in assets such as machinery from their taxable profits. Indirect tax changes, including those related to VAT, contributed another £582 million to compliance costs.

Tom Shave of Ryan urged the Chancellor to prioritize stability, emphasizing that uncertainty in tax policy acts as a deterrent to investment and growth. “The boldest tax policy this Budget could deliver is no change at all,” he stated, highlighting the negative impact ongoing policy shifts have on business confidence and economic momentum.

The 140 tax measures considered in the analysis exclude those affecting only individuals or that have no immediate bearing on businesses. The Treasury did not provide a comment in response to requests.