Ahead of this month’s Budget announcement, the Northampton office of business and financial advisers Grant Thornton has set out its key recommendations to help the county’s mid-sized businesses (MSBs) continue to make a strong contribution to both the local and national economy.
Grant Thornton sees MSBs* as holding the key to unlocking significant growth across the UK economy and according to the firm’s Agents of Growth research, further measures to promote MSB growth and productivity could add an additional £50 billion to the UK economy by 2020.
Kevin Gale, Practice Leader of Gr
Ahead of this month’s Budget announcement, the Northampton office of business and financial advisers Grant Thornton has set out its key recommendations to help the county’s mid-sized businesses (MSBs) continue to make a strong contribution to both the local and national economy.
Grant Thornton sees MSBs* as holding the key to unlocking significant growth across the UK economy and according to the firm’s Agents of Growth research, further measures to promote MSB growth and productivity could add an additional £50 billion to the UK economy by 2020.
Kevin Gale, Practice Leader of Grant Thornton’s Northampton office commented: “Ahead of one of the most hotly contested and unpredictable General Elections in modern memory, the Chancellor has a unique opportunity to set in motion policies which will enable local, regional and national businesses to grow the economy in the years ahead – irrespective of who wins the election.”
To this end, Grant Thornton has written to the Chancellor of the Exchequer to prioritise the following four areas for business growth:
Exports
Latest ONS figures show the UK’s trade deficit grew last year to £34.8bn – the widest trade gap since 2010 which has largely been driven by a steep fall in UK exports.
In its Autumn Statement submission, Grant Thornton proposed a tax relief to help businesses with the initial costs of researching and entering a new export market. The idea now has widespread support from business organisations including CBI, Forum of Private Business, Institute of Directors, British Chamber of Commerce and ICAEW, and Grant Thornton would like to see the Treasury launch a consultation on this.
Skills and training
Positively, the latest Grant Thornton/ICAEW Business Confidence Monitor reported that fewer East Midlands businesses than the UK average felt availability of skills was a greater issue than it was 12 months ago. However, the proportion still remains high.
Grant Thornton welcomed the Chancellor’s announcement in the Autumn Statement of an exemption from employer’s National Insurance Contributions for apprentices under 24 years but believes this should be extend to apprentices of all ages to further stimulate employer investment in training.
Regulatory and administrative burdens
Grant Thornton’s Agents of Growth research found that regulatory burdens are the biggest barrier to growth for MSBs with 43.5% stating this would be more of an issue in 2015 than last year.
The firm believes the Office of Tax Simplification (OTS), set up in 2010, has played an important role and strongly supports the recommendations of its review on the competitiveness of UK tax administration.
Grant Thornton urges the Chancellor to commit to rapid implementation of all OTS recommendations and would also encourage government departments to stop treating all businesses with turnover above £25million as ‘large businesses’.
Access to long term growth finance
The latest Grant Thornton International Business Report survey showed only 8% of UK businesses felt access to short-term finance was a potential constraint; the lowest amongst global economies surveyed.
Grant Thornton therefore believes the government is right to focus on longer term growth capital, rather than short-term finance, and welcomes proposals for a new ‘Help to Grow’ initiative by the British Business Bank.
Kevin Gale concludes: “Policies aimed particularly at Northamptonshire’s MSB population such as the recently announced ‘Help to Grow’ scheme are indeed commendable. However, yet more can and should be done to further create a business environment fit for purpose in the long term.
“This includes not only enabling high-growth companies to shine but recognising the crucial role played by the often-overlooked mid-sized businesses which have kept the economy ticking in the downturn and are now re-establishing Britain as an international business hub.”
* MSBs: firms with 50 to 499 employees and/or turnover of £25 million to £500 million
