News Column

Booming mid-sized firms hit hard by UK tax system

June 23, 2014

MICHAEL BIRD



THE UK'S mid-sized businesses will grow at a faster pace than German companies of the same size this year, according to a new report released today, with firms in the capital leading the way.


Mid-market companies are expected to see sales growth of 6.1 per cent during the next 12 months, faster than any other major European economy. The businesses will outstrip even the 4.8 per cent expansion of Germany's famous "mittelstand", according to a report this morning.


In London, the rise will be even more impressive, with researchers expecting a 9.1 per cent jump in sales. The research, released by GE Capital, defines a business with turnover of 15m-800m as mid-market.


"Confidence in the capital is the highest amongst the UK regions and is clearly having a positive effect on businesses planning for the year ahead," said GE Capital chief executive Ilaria del Beato.


Three quarters of London's midsized firms feel generally confident as opposed to 59 per cent in the UK, and 58 per cent are looking to move into new markets.


Despite the impressive potential for growth, a second report today from the Confederation for British Industry (CBI) and Grant Thornton slams the treatment that medium-sized firms get from the taxman.


"Medium-sized firms are not able to benefit from the incentives that small firms do and at the same time most cannot afford to have an army of tax consultants on speed dial to help them wade through the complexities of the system," said John Cridland, director-general of the CBI.


Currently, companies with a profit of more than 1.5m must pay quarterly corporation pay payments, a threshold which the authors would like to be lifted to 5m.


The CBI and Grant Thornton also say they would like a "roadmap" to reduce the tax burden on businesses generally, using the plan to steadily reduce corporation tax set out in 2010 as a blueprint.


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Source: City A.M. (UK)


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