Ahead of the Autumn Statement, new research from Grant Thornton UK LLP shows that mid-market confidence in government support provided for business has declined since the Spring Budget.
Before the Budget in April 2023, 79% of the 600 mid-market respondents to Grant Thornton’s Business Outlook Tracker said they felt confident that the government is doing enough to support business through the current economic challenges – in the latest round* that figure fell by –10 percentage points (pp) to 69%.
The recent findings show that the top priority policy areas for business were infrastructure (37%), greater access to / investment in skills (34%) and incentives for employers to invest in research and development (R&D) (31%). Tax reform was a lower priority overall for mid-market business leaders (21%).
John O’Mahony, Gatwick practice leader at Grant Thornton UK LLP, said: “Over the past few months, the Prime Minister and the Chancellor have made it clear that the UK’s current fiscal position, along with economic priorities to cut inflation and bring down debt, mean this will not be a Statement of big tax giveaways. However, the fiscal position is rumored to be better than expected and with the government’s pledge to halve inflation this year met this week, a sense of optimism has entered the government’s narrative, with the Chancellor positioning the Autumn Statement as a ‘Statement for Growth’.
“Incentives for R&D remain a top three priority overall for mid-market businesses, and the top priority within tax reform. The R&D tax regime is in the midst of significant reform, with the future direction of travel still uncertain, with the government’s decision on whether to proceed with [merging the Research and Development Expenditure Credit (RDEC) with the SME R&D relief to create] a single RDEC-style scheme still hanging in the air.
“Given the number of changes to business taxation over the past few years, that tax reform is a lower priority may be a reflection of the desire for a stable tax environment in which businesses can make investment decisions with certainty.”