2017 proved challenging for many businesses, with a downgrade for productivity growth announced in the latest Autumn Budget, an increase in inflation and confusion caused by Brexit. We surveyed a group of businesses engaging in R&D to gauge attitudes going into the new year, and despite last year’s challenges, the outlook for the coming 12 months seem positive.
Over 60% of businesses we surveyed predict growth in 2018, and almost 80% of respondents said their focus for 2018 remained on hiring more staff and developing new products or services. Furthermore, over three quarters of the UK manufacturing, engineering, IT and life sciences businesses polled said they expected to see an increase in turnover and improved productivity this year as a result.
Though surprisingly, when questioned on funding their growth, half of those polled said they would invest profits, while 57% believed they didn’t need any additional funding and under a third stated they planned on applying for R&D tax credits. This is despite 29% of businesses identifying cash flow will be the biggest barrier to achieving their aspirations.
Mike Price, Director at MPA, commented on the survey findings:
While it’s encouraging that business outlook remains positive for the coming 12 months, further supported by the strong focus on innovation outlined in the latest Autumn Budget, it is also important that businesses look at all the ways they can successfully fund their growth. R&D tax credits offer a valuable cash injection which can be reinvested to support new business ventures, investment in equipment, or help to employ a greater number of skilled staff.Mike Price, Director, MPA
The latest HMRC figures reported a 20% increase in the uptake of R&D tax credits compared to the previous year. Yet, for thousands of businesses it remains a largely misunderstood, or even unknown scheme.