Chancellor falls short of restoring confidence amongst manufacturers
Chris Barlow · March 16th 2023 · read
While manufacturers will be buoyed by new incentives to plan and invest, the Chancellor has missed some valuable opportunities to provide greater support to a sector under pressure.
Challenges within manufacturing sector have been plentiful and the continued absence of an industrial strategy remains a significant misstep from the government. That said, the Chancellor has implemented a number of measures that should allow manufacturers to plan and invest. The full expensing of IT, plant and machinery from taxable profits will provide welcome relief alongside the £1 million annual investment allowance to help manufacturers plan with some level of confidence for the first time in a while.
Measures to tackle the UK’s labour shortages and the so-called ‘returnerships’ with skills boot camps and sector-based work academies seem to be a call to over 50s who have left the workforce early. The manufacturing skills shortage has long been a hindrance, so while it will need more detail, this is a step in the right direction to help inject vital skills to the sector.
There has been a missed opportunity not to correct the previously announced measures to reduce R&D relief for SMEs. Whilst companies which invest most heavily in R&D expenditure will be eligible for further relief the majority of SME's will be disappointed that previously announced cuts will remain. Additionally, the 6% rise in corporation tax, whilst well trailed, is a missed opportunity to release the tax burden felt by manufacturers. More importantly, the failure to reduce the tax does nothing to make the UK more attractive compared to our European counterparts.
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