When I wrote in September 2020 that manufacturing output had grown at its fastest rate since May 2014, I never imagined we would still be feeling the pandemic’s effects 12 months later. Nevertheless, the take up of the vaccine across the UK does give some grounds for optimism.
Manufacturing production continues to grow in the face of various obstacles and showed a 13.9% year on year increase up to June 2021. However, output remains 2.3% below its pre-pandemic level in February 2020.
Without doubt, the manufacturing industry continues to face many obstacles. These include disruption caused by staff shortages, both as a result of the pandemic and the general skills shortage, as well as the uncertainty of Brexit and its impact on exports and supply chain issues. The recent queues at petrol stations have only added fuel to the fire.
Generally, however, UK manufacturing is well on the road to recovery and is among world leaders in many high-tech areas, including AI, aerospace and robotics.
Companies operating within the manufacturing industry need to remain agile and be ready to address issues as they impact. We, at Thomas Westcott, can offer a broad range of support services to assist.
Minimising tax liabilities and accessing reliefs
Many companies miss the opportunity to obtain high levels of tax relief when they undertake new projects. For example, we regularly help small and medium sized businesses access Research and Development tax relief. These firms are often not aware that they qualify for the relief and many do not realise that the activity they are carrying out is, in fact, research and development.
We also offer capital allowance advice to help manufacturing firms grow by investing in new equipment. This includes accessing the new “super deduction” of 130% against expenditure on plant and machinery and allowances on fixed plant contained within buildings.
Our growing tax team can also review your company motor vehicle policy to ensure it is as tax efficient as possible. This is particularly important now, as many businesses consider a move to electric or hybrid vehicles.
Many of our manufacturing clients also benefit from our advice on VAT and tax planning strategies, as well as Stamp Duty Land Tax advice when they are investing in new premises. We help others qualify for the lower rate of Corporation Tax by entering into the Patent Box.
By understanding your business, your aims and ambitions, we can help you minimise tax liabilities and access reliefs.
Developing efficient accounting systems
Having more efficient, agile accounting systems can have a transformative effect on a business.
We are helping many of our manufacturing clients make the shift from desktop accounts software to cloud based systems. This includes helping clients design and implement accounting systems and giving advice on software and streamlining processes.
Our specialist advice on management accounts can support you to make informed decisions and projections throughout the year. Through our comprehensive end of year accounting service we can help you stay compliant, including fulfilling your statutory audit requirements.
The complexities of administering salaries when the furlough scheme was in place meant that many businesses took the decision to outsource their payroll. We are supporting growing numbers of clients with maintaining their company payroll and auto enrolment.
Making major changes in your business
During the pandemic, many people have made major decisions about their lives and businesses. For some, this has meant taking the decision to exit the business. Others have diversified or expanded by acquisition.
We support manufacturing businesses through these major milestones. Our Corporate Finance team carries out business valuations and advises clients on buying and selling businesses, including management buy-outs.
The impact of the pandemic and Brexit means many manufacturing firms are looking to new markets. As a member of the international PrimeGlobal group of accountancy firms, we can advise on doing business overseas.
Managing your personal finances in line with your business
If you run a business, it is vital that your personal financial planning complements your business planning. Over the last 18 months, many of us have had the chance to reflect on our priorities and future goals. As a result, we are providing financial planning advice to growing numbers of clients. This includes advice on pensions, tax effective business and income protection policies, investments, wealth management and more.
Whatever challenges and opportunities you face in your manufacturing business, talk to us. For further information, please contact your local Thomas Westcott office.
By Peter Webb, Partner