UK manufacturers are requesting that the Chancellor, Jeremy Hunt, announces an overhaul of the UK’s business tax and regulatory rules in the Autumn Statement to boost investment plans.
The call from manufacturers to make these changes came from a survey that was conducted by Make UK where almost half of the respondents believed that the current system was unfavourable.
In addition, some manufacturing companies commented on the fact that the frequent changes to the rules regarding investment incentives and R&D made it difficult to plan investment and have asked for stability in this regard. They also suggested that the chancellor should announce only one fiscal statement per annum to reduce the frequency of rule and legislation changes.
What areas would manufacturers like the government to look at?
Any reforms would look at areas such as Business Rates, R&D tax relief, the Apprentice Levy, Capital Allowances and the Full Expensing system. The economy is currently going through huge changes and the current rules need to be analysed in order to calculate whether they are encouraging or hampering areas such as investment, innovation, skills or moving to net zero. Report findings demonstrate that an industrial strategy that embraces the reform of current business tax and regulation system would point to greater investments in labour, skills, R&D and decarbonisation.
How do we compare to other countries?
The survey found that UK manufacturers believe that the UK tax and regulatory system is less favourable than other countries. 28% believe that we are less favourable than China, 27% for the US, 26% for Germany, 23% for France and 21% for Italy.
What are the most effective policies currently?
The survey found that the effective policies to promote investment and growth are capital allowances for plants and machinery (73%) R&D tax relief (65%) and a competitive corporation tax system (59%). This demonstrates that these are the areas that manufacturers believe that the government should focus on improving to boost investment and growth in the manufacturing sector.
How can we help?
Hawsons has a dedicated team of specialist manufacturing and engineering accountants in Sheffield, Doncaster and Northampton.
Our specialist team offers a wide range of services which are tailored to meet your individual needs. Our understanding of the issues faced by the manufacturing and engineering businesses means that we can proactively seek out ways for you to maximise your profitability and minimise your tax liabilities.
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