With one week to go until the Autumn Budget, and the anticipated publication of the Government’s business tax roadmap, companies in the Midlands are calling for more certainty on taxes to help stimulate growth within the region.
According to the latest research from accountancy and business advisory firm, BDO LLP, nearly a quarter of Midlands businesses (22%) want a commitment from the Government to replace business rates, potentially with a local business income tax, with more than one in ten businesses in the region (15%) wanting assurances from the Chancellor that full expensing capital allowances will remain for the life of this Parliament.
Skills are also high on the agenda, as regional businesses continue to tackle workforce pressures, with one-fifth urging the Treasury to replace the apprenticeship levy with a more simple growth and skills levy.
Nearly a quarter (23%) stated that a long-term partnership between the education system, local government and businesses – one that enables young people to connect with local employment and training – is a policy that would have a positive impact on their business over the next six to 12 months.
BDO’s bi-monthly Economic Engine survey of 500 mid-sized businesses, also revealed that regulatory changes to improve access to capital or simplify the listing process for the London Stock Exchange would also be beneficial for a quarter of companies (25%).
Kyla Bellingall, regional managing partner at BDO in the Midlands, said: “What many Midlands businesses would most like to see at next week’s Budget is a clear business tax roadmap which provides predictability and stability to allow them to plan ahead with confidence.
“Our own manifesto for mid-sized businesses outlines measures to enable these businesses to succeed. Amongst other asks, it calls for the Government to create a cross-party commission on tax to develop pragmatic solutions to key fiscal matters, and ensuring mid-sized businesses have the skills pipeline they need to grow and expand.”
She added: “Mid-sized businesses in the Midlands are the driving force of the regional economy, contributing £224bn in revenue and employing 1.3 million people. It’s absolutely essential that they are encouraged and incentivised to grow through policy and taxation that supports their strategic ambitions.”
Looking ahead to future growth ambitions, the survey reveals that a third of Midlands businesses (32%) are planning to source new equity investment to fund growth, with 35% of companies in the region stating that they intend to prioritise investment in new technologies, such as artificial intelligence (AI) and automation.
BDO’s survey showed that the top workplace issues affecting businesses in the region include: changes to policy or regulation, which are creating uncertainty around skilled worker visas and employment contracts, new technology changing the approach to recruitment, and difficulty recruiting staff with the right skills.
Bellingall added: “It’s encouraging to see that innovation remains at the core of how businesses intend to reach their growth potential. However, there are still a number of notable challenges at play, including the enduring issue of recruitment and retention, which need to be addressed to allow these businesses to reach their full potential.”
