Five-point plan for post-Brexit 'New Economy'
UK accountancy and business advisory firm BDO has called for mid-sized business to be at the heart of the UK’s post Brexit future.
BDO recently unveiled a five-point plan to support mid-sized business post-Brexit, stressing the need for a greater focus on skills, simplified taxes, ‘shovel-ready’ infrastructure, patient capital and productivity.
Mid-sized businesses are the UK's economic engine, BDO explains. They account for only 0.5 per cent of all UK businesses (29,000), yet over one-third of UK revenue and almost one in three private sector jobs.
Despite their impact on the economy, BDO believes that these economic engine companies fall into a policy gap and are ‘overlooked and undervalued’.
“Too big to benefit from the raft of policies aimed at smaller businesses and yet too small to have the ear of government like major corporations, the needs of mid-sized businesses often go unheard,” the firm said.
BDO’s five-point plan
Simplifying tax: Aligning national insurance and income tax to create one simple earnings tax.
Infrastructure: Invest in smaller ‘shovel-ready’ projects for quicker wins.
Skills: Reinstate the two-year post-study work visa to help address the manufacturing and tech skills shortage.
Boost productivity: Increase the annual investment allowance to £5 million for five years to help boost productivity.
Patient capital: Consider radical steps to increase pension scheme investment in patient capital following the successful model in France where corporate employee saving schemes must offer a solidarity investment funds option.
Moratorium on corporate tax changes
BDO also called for a moratorium on UK corporate tax changes until 2022, or when the Brexit transition period is over, to give businesses certainty in uncertain times.
“With Brexit-induced uncertainty and the current crisis on the British high street, the need for a new economy to support ambitious businesses is clear,” Mark Johansen-Berg, CEO of retailer Skate Hut, said.
“While there may be benefits from leaving the EU in the future, Brexit is having a negative impact now. We have experienced this first hand with the lack of economic visibility forcing us to postpone our expansion plans resulting in us making the first redundancy in our company’s history.”
Mr Johansen-Berg explained that one of his main concerns is that leaving the EU will increase red tape for exporters, which is why he urges the government to make smart reform of regulation a priority.
“As BDO has identified, there are policies the government can introduce, such as simplifying tax policies, which would have a real impact and help us thrive post-Brexit,” he concluded.