Support for businesses looking to break into international markets is top of the agenda among firms looking for a boost from the Budget next week.
Chancellor of the Exchequer George Osborne is expected to deliver a fiscally neutral budget on Wednesday as he presses ahead with his strategy to reduce government borrowing.
But while there are few “sweeteners” that Mr Osborne can afford, it is widely expected he will announce plans to support exports in an effort to rebalance the economy whose recovery up until now has largely been driven by consumer spending.
Howard Archer, chief UK economist for IHS Global Insight, notes pressure on the Chancellor to “increase the amount of export finance available and to also streamline the process in applying for and receiving the finance”.
Ian Williams, of Campbell Dallas in Aberdeen, said now is the time to boost exports, particularly for the oil and gas services sector.
He said: “George Osborne recently called for an increase in exports in a speech to business leaders in Hong Kong.
Furthermore, the British Chamber of Commerce highlighted that global exports fell by 4.9% in Q4 last year.
“Mr Osborne indicated that his Budget will support business investments and exports to cement ‘long-term economic security’.
“He must commit to this pledge for the good of the economy.
“Our oil and gas sector is strong and burgeoning, but we need to continue to export our innovation, skills and services.”
Martin Bell, tax partner with BDO, says that medium-sized firms – those that are most likely to grow into bigger companies and also those most likely to benefit from export support – should be where the Chancellor targets his efforts.
He said the UK should be brought in line with France and Germany where governments provide tax allowances for expenditure on factories – either extending or improving them. “UK tax allowances for expenditure on factories were removed in 2011,” said Mr Bell. “UK businesses are at a competitive disadvantage.”
He has also called for a VAT zero rating on supplies to companies that export, a benefit that companies in Ireland enjoy.
“The UK currently allows manufacturers to zero rate their exports. However, it is less generous with reliefs for supplies made to UK exporters by other UK businesses,” he said.
The benefit of this, he added, was that it would be “Exchequer neutral”.