BDO: five-point plan for businesses post-Brexit

BDO: five-point plan for businesses post-Brexit

BDO believes in the formation of a ‘New Economy’ following on from Brexit, with economic engine companies at the heart of it

BDO has announced the launch of their five-point plan for a ‘New Economy’ post-Brexit. The top ten firm has cited the need to place the “economic engine” of UK companies at the heart of this scheme to help increase productivity in the face of uncertainty.

The firm stated: “The UK’s ‘overlooked and undervalued’ mid-sized businesses need greater recognition and support as the country prepares to leave the EU.”

Although the “economic engine” businesses in the UK are high-growth, entrepreneurial, and ambitious, they “account for only 0.5% of all UK businesses (29,000), yet over one third of UK revenue (£1.3tn), and almost 1 in 3 private sector jobs.”

“With Brexit-induced uncertainty and the current crisis on the British high street, the need for a New Economy to support ambitious businesses is clear,” Mark Johansen-Berg, CEO of Skate Hut, said.

BDO’s five-point plan highlights the need to focus on simplified taxes, infrastructure, patient capital, productivity, and skills.

However, despite the impact these businesses have on the economy, BDO has cited that they fall into a policy gap. This is due to the fact that they are “too big to benefit from the raft of policies aimed at smaller businesses, and yet too small to have the ear of the government, like major corporations, the needs of mid-sized businesses often go unheard.”

Johansen-Berg continued: “While there may be benefits for leaving the EU in the future, Brexit is having a negative impact now. We have experienced this firsthand with the lack of economy visibility forcing us to postpone our expansion plans, resulting in us making the first redundancy in our company’s history. Government need to do more to support British businesses like ours in readiness for life after Brexit.

“One of our main concerns is that leaving the EU will increase red tape for exporters, which is why we would urge the government to make smart reform of regulation a priority. As BDO has identified, there are policies which would have a real impact and help us thrive post-Brexit.”

BDO’s five key policies are as follows:

  • Simplifying tax: the formation of one simple earnings tax through the alignment of National Insurance and Income Tax.
  • Infrastructure: investment in ‘shovel-ready’ projects, in order to secure quicker wins.
  • Skills: reinstating the two-year post-study work visa to help address the manufacturing and tech skills shortage.
  • Boost productivity: the annual allowance investment being increased to £5m for five years. This will help to drive productivity in the UK.
  • Patient capital: the consideration of radical steps to increase pension scheme investment in patient capital. This is following on from the successful model employed in France, where Corporate Employee Saving Schemes must offer a Solidarity Investment Funds option.

Furthermore, BDO has also called for a “moratorium on UK corporate tax changes” until 2022 or when the Brexit transitional period has ended, dependent on which of these eventualities happens first. The purpose of this would be to allow businesses some structured certainty in uncertain times.

As well as this, the firm has suggested that the reform of the Ofsted assessment system for schools would give more weight to the number of apprenticeship places secured by schools. Finally, BDO encouraged steps to be taken that will enable the recognition of intangible assets. For example, intellectual property when calculating the cost of capital – therefore making it cheaper to invest.

Managing partner at BDO, Paul Eagland, concluded: “The UK is on the cusp of great changes. Brexit is perhaps the most visible of the challenges facing our economy, but it would be wrong to categorise it as the only one. Technology, regulation, and emerging global markets are all creating uncertainty as well as opportunity.

“Successive governments have taken great strides to create a business-friendly environment in the UK, but there is always more that can be done. The policies we outline will help all businesses generally, but mid-sized businesses specifically. The UK’s mid-sized entrepreneurial businesses act like an engine of the UK economy, and they must form the cornerstone of the government’s post-Brexit plans so that they thrive at home and abroad.”

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