Manufacturing Wish List for Budget 2018
Richard Powell, Partner at our member firm MHA MacIntyre Hudson discusses why the Chancellor should shift from a scattergun approach and deliver more support for UK manufacturers and engineers.
Greater funding for research and development (R&D) tax credits may be a big ask in the current economic climate, but the scheme’s focus can certainly be improved. To be a real success, these reliefs need to move away from the open door approach where businesses from any sector can claim. By targeting relief at certain sectors ripe for growth, for example electric vehicle research, and companies developing automation solutions, the government could have much more impact.
We also need decisive action to encourage investment into the UK. One of the biggest concerns for manufacturing and engineering companies is the impact of Brexit on their supply chains, and many want to build their UK supply chains to counteract this. Any steps to encourage investment into the UK will help make this a reality. Whether it’s greater tax reliefs for inward investment, or a better capital allowance regime, promoting the UK as a business destination should be high on the Chancellor’s agenda.
The skills shortage is an ongoing problem for manufacturers and engineers and must also be addressed. We believe a tiered approach to the apprenticeship levy should be considered. Industries that are important to the future of the UK but are struggling to attract talent should be prioritised. Reliefs could be banded accordingly, with 100% apprenticeship funding for key industries, and lower allocations, for example 50% funding, elsewhere.
Funds are tight, and must be maximised. If we’re to deliver the infrastructure, automation and innovation this country requires to prosper post Brexit, resources must be thoughtfully allocated to the sectors where there’s most need.
If you have any questions or if you would like to discuss this in more detail, please contact Hannah Farmborough or call on 0207 429 4147 to be put in contact with a member of our Manufacturing or Tax team.
This article originally appeared on the blog of our member firm, MHA MacIntyre Hudson.