...and put mid-sized businesses at the heart of UK economic growth
Leading financial and business adviser Grant Thornton UK LLP, calls on the Chancellor to use the Autumn Statement as an opportunity to announce measures specifically designed to help mid-sized businesses (MSBs) unlock their potential and further boost the UK economy.
Our Autumn Statement survey, conducted with the leaders of dynamic mid-sized businesses*, confirmed their strong support (48%) for a single and dedicated HMRC contact who knew their businesses. Over a quarter (28%) would also welcome being able to speak to event specific specialists.
On the subject of accessing finance and the reintroduction of the corporate venturing scheme, 30% of respondents would be in favour of obtaining equity investment from corporate investors, particularly with a view to fostering strategically beneficial partnerships, if it was available
Finding and training the right talent has become a familiar concern across business and nearly 40% of respondents identified their biggest skills shortage as being technical skills, followed by management, sales, finance and marketing and digital media. Of those from our survey who don't already have apprentices, 50% said that a National Insurance Contribution (NIC) exemption would make them significantly more likely to take one on.
With the trade deficit currently expanding, and government seeking new ways to encourage overseas growth, a third of businesses said that they would be more likely to consider exporting to a new emerging market such as China or India if the exploratory costs qualified for an export tax credit.
Commenting on the findings ahead of Autumn Statement, Jonathan Riley, Partner and Head of Tax, Grant Thornton UK LLP, said: "In order to maintain and accelerate economic growth in the UK, we have submitted to Government a paper outlining why they should use the Autumn Statement to back the MSBs and high growth firms (or 'scale ups') which can make the biggest contribution to wealth and jobs growth.
"Our 'Agents of growth' research has already shown that the MSB segment has continued to be disproportionately valuable throughout the downturn, contributing £305 billion to UK GDP in 2013 alone. Of this, £270 billion is estimated to be value added, roughly equivalent to the combined size of the UK real estate and financial services sectors and worth £160 billion directly into the pockets of UK households through wages and salaries. Over the last five years their employment growth has also outperformed both larger and smaller businesses.
"All this has been achieved without any targeted government support, and is indicative of the huge yet untapped potential of the MSB segment that specific policy initiatives could help unlock.
"As such, we are continuing to call for personalised account management for MSBs by government and a dedicated team to look at MSB issues, which would provide the focus needed, while also identifying any cumbersome processes that should be removed.
"We know that finance remains a concern for MSBs and again, encourage government to explore a provision for corporate venturing which would channel the great cash reserves that are currently sitting on balance sheets, to dynamic MSBs, while also enabling strategic partnerships. An ever expanding army of think tanks and business organisations is backing our call for reintroduction of a corporate venturing scheme. This could have significant benefits not only in the UK's burgeoning tech sector, providing the finance for digital start-ups to grow , but across the other sectors too.
"Our interaction on the ground with businesses, as well as our most recent survey findings, show that extending the under 21 employers' NIC exemption to all apprentices would increase the number of businesses offering high quality opportunities; this can only be good news as talent development becomes of increasing concern across business and government.
"The trade deficit has weighed on the British economy for 30 years, and according to recent figures, appears to be expanding. A bold incentive is needed to shift the UK mind-set; government should consider an export tax credit for the costs of exploring new markets, in order to incentivise new exporters. The threshold for transfer pricing should also be raised to ease the burden on MSBs."
*Of the businesses that responded to the survey at least 50% had employees numbered between 49 – 500.