65% of the UK manufacturing industry would commit to greater investment if incentives for capital expenditure were increased.
This is according to a new survey from accountancy and business advisory firm BDO
The poll of over 200 manufacturers also found 61% said that a simplification and extension of R&D tax reliefs would help drive further investment in innovation.
The new figures are released to coincide with the pre-Budget publication of BDO’s Manufacturing Manifesto, which details a number of targeted tax measures designed to drive a post-COVID-19 recovery in UK manufacturing and signal to entrepreneurs that the UK is a great place to invest.
The UK’s manufacturing sector is vital for the UK economy, accounting for £191 billion of output, 53% of total exports and 2.7 million jobs. Yet the latest data from Make UK, the manufacturers’ organisation, shows investment intentions have suffered badly as a result of the pandemic.
This risks firms falling behind international competitors without the right incentives to stimulate investment in R&D, green technology, digital transformation, training and jobs.
BDO’s key proposals include:
Richard Austin, BDO’s head of manufacturing said: “We recognise that the Government is under significant pressure to recoup the costs of fighting COVID-19 but it is vital that the UK’s business tax environment remains competitive relative to other major industrialised nations. Ill-judged tax rises now could have a hugely detrimental impact on manufacturing investment and the UK’s reputation as a place to do business.
“Clearly there are multiple demands on the Government’s resources, but there is a strong case for policymakers to adopt a bespoke approach to the manufacturing sector given its pivotal role in the UK economy and its unique capital and incentive requirements. What’s required now is a clear strategy to support manufacturing in the years to come.”
Simon Bird, BDO’s tax lead for the manufacturing sector added: “With the right investment conditions, there is a huge potential for manufacturing to support a green economic recovery through the introduction of new technology and digital transformation. A clear, targeted and balanced tax policy would deliver significant benefits for the UK as a whole, helping to drive up productivity and level up the regions.”
BDO www.bdo.co.uk