Contracting businesses domiciled in the UK pay less tax than those in almost all other European international countries, according to a new study.

PricewaterhouseCooper's (PWC) found in its Paying Taxes 2011 study that with a tax rate of 37.3 per cent, the UK has the 76th lowest total tax rate of the 183 locations surveyed.

This means it has one of the lowest tax burdens expected to be shouldered by a small and medium sized business.

It was also found to be lower than most of the European nationals averages in addition to the United States' 46.8 per cent and Australia's 47.9 per cent.

In addition, PWC also found that the UK ranks as the 16th easiest location to pay tax out of the jurisdictions surveyed.

This comes after contractors were urged to ensure they keep meticulous financial records unless they want to face fines.