NEARLY nine out of 10 mid-sized businesses in Scotland (89 per cent) see tax as an opportunity to drive growth, research has found.
Business advisory firm KPMG surveyed 700 UK businesses with of revenues between £25 million and £300m, 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 named 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” was 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 England (60 per cent), the Midlands (68 per cent), Yorkshire and north-east (61 per cent) and Wales (58 per cent).
Overall, there was 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. However, Turner said: “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 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.”
Meanwhile, a separate report, has shown that fewer SMEs in Scotland are measuring productivity than the UK average.
The Power of Productivity: The role of SMEs, produced by merchant bankers Close Brothers Group shows one-third of SMEs in Scotland don’t measure productivity, compared to 28 per cent in the UK overall. However, of those that don’t measure, 95 per cent said they would consider doing so, compared to 68 per cent in the UK.
Productivity has been increasingly talked about since the Brexit negotiations begin. The UK currently lags 16 per cent behind the other G7 countries.
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