Welcome to our second edition of Backing business growth study, which explores attitudes to growth and tax amongst UK SME and Mid-Market businesses.
We surveyed 1000 companies with an annual turnover of £10m to £750m – a group which is often overlooked in the debate about tax. We wanted to understand how they viewed things and how they engaged with the system, whether it supported their growth plans and whether it was being used as the Government intended.
While the results are consistent with last year’s in many areas, there are also some significant shifts in thinking. Businesses do not always see clear connections between the tax system and growth drivers, and plans for growth alter companies’ perceptions of tax as an enabler.
Key findings from the study include:
- The vast majority of businesses are optimistic about their growth prospects for the current year, but only 24% overall view tax as a driver for growth (down from 71% last year)
- Concern that the tax system is too complex has increased (mentioned by 62%, up from 38% last year) and only 27% of businesses are making full use of the tax system (down from 75%)
- 57% of our sample feel that large multinational corporations have too much influence on UK tax policy, although this was lower than last year (72%)
- Businesses are clearest in identifying the best tax incentives for job creation and investment, but there is less agreement around policies to support innovation, creativity, productivity, growth and regional development
- More proactive support from HMRC and the ability to better manage their tax affairs through digital tools would be welcomed by all businesses.