Growth and investment is tax priority for mid-sized Scots businesses - KPMG report

Nearly nine out of ten mid-sized businesses in Scotland (89 per cent) see tax as an opportunity to drive growth, according to research from KPMG.

The business advisory firm surveyed 700 UK businesses with revenues between £25 million and £300 million, including 100 respondents in Scotland, on their attitudes to tax policy, access to tax incentives and the drivers behind financial management.

When asked to identify the opportunities that tax policy provided, job creation was identified by almost half of respondents (45 per cent), ahead of improving margins (40 per cent), investing in capital expenditure (35 per cent), supporting exporting (25 per cent) and attracting investment (22 per cent).

Fewer than a one in six respondents (14 per cent) said that their priority was to simply meet compliance requirements and only a quarter of mid-sized businesses (23 per cent) said that ‘protecting the bottom line’ is their main concern.

Alan Turner, head of tax at KPMG in Scotland, said: “Most mid-sized businesses in Scotland are on board with Government strategy and appreciate the growth opportunities that a well-considered and transparent tax strategy can offer. While it may be a surprise to some that few companies are solely focused on protecting their bottom line, it is encouraging that the prevailing attitude is that tax policy, though incentives and reliefs, can boost employment, investment and revenues.”

The majority of businesses surveyed in Scotland (84 per cent) felt the tax system is designed to help small and mid-sized businesses succeed and contribute to economic growth; there were far lower levels of consensus in North West where only three in five (60 per cent), the Midlands (68 per cent), Yorkshire and North East (61 per cent) and Wales (58 per cent) shared the same view.

Mr Turner continued: “Britain is at a junction as it shapes the economy for life outside of the European Union. Addressing imbalances between regions should be a priority of the Government and that starts with creating a tax system that is more supportive and accessible for all businesses.”

Overall there is a high level of satisfaction with engagement on tax policy with nearly three quarters (74 per cent) of respondents saying that small and medium-sized businesses had been adequately heard when it comes to developing tax policy.

Mr Turner added: “We shouldn’t get complacent; there is more work to be done in giving businesses in Scotland of all shapes and sizes a stronger voice in shaping tax policy. The Government should consider new ways to work with businesses to ensure that they feel engaged and have the chance to steer policy in a way that will foster growth and investment in this critical segment of the economy.”