Grant Thornton urges government to back mid-sized businesses
Grant Thornton calls on government to show greater support for mid-sized companies as they drive UK growth
GRANT THORNTON has lent its weight to calls for the government to back high-growth, mid-sized firms in the Autumn Statement on 3 December.
In a 20-page document submitted to the chancellor, the top-ten firm called for each business turning over between £25m and £500m to be allocated an HMRC account manager; a cross-government account manager in order to increase awareness and uptake of government business initiatives and ensure better policy making; and a dedicated medium-sized business team to provide such companies with a greater voice.
In addition, measures to encourage corporate venturing, to channel corporate cash reserves to enable ‘scale ups’ and increase technological innovation, and tweaks to HMRC rules to smooth the cash flow problems that quarterly tax payments create for growing companies were also called for.
“Over the last five years, employment growth by mid-sized businesses (MSBs) has outperformed both small and large firms. In addition, the MSB sector has now overtaken large firms to be the most productive segment of the UK economy, with a 10.6% increase in productivity since 2011. Yet these ‘agents of growth’ tend to be the forgotten ‘middle child’ for government, overshadowed by small firms and large corporates,” Grant Thornton said in its report.
In June, GT national head of tax Jonathan Riley said some mid-sized companies should be removed from regimes such as transfer pricing and R&D. “They don’t have the help available to small businesses, or the voice of larger ones. They’re literally caught in the middle,” he said at the time.
In the latest report, he called on HMRC to help with exports by supporting UK businesses in disputes with overseas tax authorities and through the implementation of Office of Tax Simplification recommendations to simplify transfer pricing rules for medium sized businesses.
“We have heard examples of MSBs retracting from investments and pulling out from new markets because of tax roadblocks caused by application of transfer pricing and transfer of assets rules,” the report read.