When asked to rank what their organisation most needs to hear from the Chancellor in next week’s Spring Budget, well over a third (41.7% of respondents) said improving the tax system to support business investment. This was well ahead of the second most popular answer, which was greater childcare support for parents (11.3%).
The most enthusiastic supporters of changes to tax were medium-size businesses with between 50 and 249 workers, (72.7%) and smaller businesses with fewer than 49 workers, (45.7%). This reflects these firms’ lower capacity to invest if the tax system works against them. And this clear demand was reflected evenly across the UK’s regions and nations. Only London was an outlier with 19% of employers naming it as their top priority (where the preference for a top priority was greater childcare support for parents (25.6%)).
Neil Carberry, REC Chief Executive, said:
“We all know Britain has a problem with investment – yet it is companies committing to the long-term that drives the economy forward. Using the tax system to help drive business investment should be a key tool. From IR35 to the Apprenticeship Levy, and expensing rules that leave out hired kit to business rates, the system puts more barriers in the way of companies than it should.”
REC also suggests that a reward for the Exchequer in a more sustainable and dynamic labour market is possible if it considers a ‘green tax credit’ for businesses that invest in low carbon skills. This will help towards achieving Net Zero and secure our future labour and skills supply.
Neil Carberry added:
“There is no growth strategy that isn’t a green growth strategy. The UK has an opportunity to lead this new industrial revolution – but only if we lower barriers to investment, on tax and on planning.”
