Finance · 12 October 2018

Could free government cash bring small businesses out of productivity crisis?

productivity allowance
The productivity allowance would let business owners cut their overall tax bill to invest in leading technologies
The government is being urged to bring in a new “Productivity Allowance” to help drag the UK out of a “lost decade” of economic woes.

The move, which would see the creation of a new tax allowance for productivity-raising technologies, is part of a new Institute of Directors (IoD) report Lifting the Long Tail: The productivity challenge through the eyes of small businesses.

The IoD said the new Enhanced Capital Allowance would provide a clear signpost and greater incentive? for small business leaders to invest in defined best practice technologies, such as data analytics and cloud computing, by allowing them to cut their overall tax bill by more than what is already available under existing schemes.

‘solving the productivity puzzle has been a defining challenge for the UK over the past decade. The success of our post-Brexit economy hinges on our ability to unlock the vast untapped potential among UK small businesses, said Ted Parikh, senior economist at the Institute of Directors.

directors of smaller firms need the support and encouragement to spend more time working on? and not just in? their organisation, and to confidently adopt new management techniquesand technology.

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productivity

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