New survey shows businesses want focus on business investment from Spring Budget tax changes

Employers responded to an REC survey saying they are eager for changes in the Spring Budget that will help them to hire and invest.

When asked to rank what their organisation most needs to hear from the Chancellor in next week’s Spring Budget, well over a third (41.7% of respondents) said improving the tax system to support business investment. This was well ahead of the second most popular answer, which was greater childcare support for parents (11.3%).

The most enthusiastic supporters of changes to tax were medium-size businesses with between 50 and 249 workers, (72.7%) and smaller businesses with fewer than 49 workers, (45.7%). This reflects these firms’ lower capacity to invest if the tax system works against them. And this clear demand was reflected evenly across the UK’s regions and nations. Only London was an outlier with 19% of employers naming it as their top priority (where the preference for a top priority was greater childcare support for parents (25.6%)).

Neil Carberry, REC Chief Executive, said:

“We all know Britain has a problem with investment – yet it is companies committing to the long-term that drives the economy forward. Using the tax system to help drive business investment should be a key tool. From IR35 to the Apprenticeship Levy, and expensing rules that leave out hired kit to business rates, the system puts more barriers in the way of companies than it should.”

REC also suggests that a reward for the Exchequer in a more sustainable and dynamic labour market is possible if it considers a ‘green tax credit’ for businesses that invest in low carbon skills. This will help towards achieving Net Zero and secure our future labour and skills supply.

Neil Carberry added:

“There is no growth strategy that isn’t a green growth strategy. The UK has an opportunity to lead this new industrial revolution – but only if we lower barriers to investment, on tax and on planning.”

Ends

Notes to editors:

REC commissioned Savanta to survey by telephone in February 2024, 167 employers of different sizes, locations and across private and public sectors.

The REC/Savanta survey question asked which of the following options, if any, does your business most needs to hear in the Spring Budget? Please rank these according to your preference. You can rank just the options you would like to hear about.

•           Improving tax system to support business investment (48.1%)

•           Increase access to AI and business automation technology (14.6%)

•           Pro-business reforms of immigration rules (16.8%)

•           Reform to the apprenticeship levy and training provisions (29.0%)

•           More coordinated approach to support green jobs and green investment (21.3%)

•           Greater childcare support for parents (35.3%)

•           Further investment in local transport (34.9%)

•           None of the above (19.6%)

Selection percentage of options as Top Priority

•           Improving tax system to support business investment (41.7%)

•           Increase access to AI and business automation technology (5.4%)

•           Pro-business reforms of immigration rules (3.6%)

•           Reform to the apprenticeship levy and training provisions (5.8%)

•           More coordinated approach to support green jobs and green investment (2.8%)

•           Greater childcare support for parents (11.3%)

•           Further investment in local transport (9.8%)

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