Make UK: UK manufacturing to see a sharp boost in investment
Offering 130 per cent first-year relief on qualifying main rate plant and machinery investments between April 1, 2021 and March 31, 2023, latest findings from a Make UK survey identified that the 'super-deduction' tax incentive is expected to provide a sharp boost to investment for manufacturers in 2021.
“The Budget has made a clear impact on manufacturers in terms of confidence and they are stepping up their plans to invest in response. For too long the UK’s investment performance has been below par and the incentive should provide a boost in the short-term at least,” commented Verity Davidge, Director of Policy at Make UK.
Whilst a positive message, Make UK does stress the need for a long-term broad industrial strategy that puts manufacturing at the centre of pandemic recovery plans, which it believes should include a partnership between the government, industry and the UK science base to boost the UK’s innovation and investment performance.
“One swallow doesn’t make a summer and, with the economy at a crossroads, there remains an urgent need to consider how we make a structural change to permanently increase investment for the long term. This must be done in the round of an industrial strategy that looks beyond the horizon, plays to the UK’s undoubted strengths in science and innovation and seeks to truly ‘build back better’,” added Davidge.
Make UK key survey findings of 149 companies
- 22.6 per cent of companies plan to increase their investment as a direct response to the tax incentive, with 28.1 per cent planning to bringing forward investments plans in response
- 48.6 per cent said there would be no changes to their plans or that their plans were too rigid to change
- 32.4 per cent see the Budget as a measure that has the biggest impact, followed by the furlough scheme (23.2 per cent) and boost to research and development (21.2 per cent)
- 19.6 per cent of manufacturers see the Budget as a boost in confidence, with only 3.4 per cent viewing it negatively
- 55.3 per cent of manufacturers believe the planned increase in Corporation Tax will have no impact on their overseas or company investment plans, however 28.4 percent believe it will deter foreign investment, with 16.4 per cent believing it will have a negative impact on their company
- 46.9 per cent state that sales and orders have improved since the start of the year, with 15.6 per cent commenting that they had worsened
- Despite improvements, 28.1 per cent believe that returning to normal trading is more than a year away, 26 per cent state that it will take between six and 12 months
- 10 per cent of companies report that they have up to a quarter of staff furloughed, with 44.6 per cent reporting that they have up to 10 per cent