Shielding spending on ramping up exports from taxes will unlock a well of economic growth by boosting engagement with trade among Britain’s small businesses, a new report recommends today.
Allowing firms to cut their tax bills by offsetting investment in exports would strengthen incentives for small firms to participate in trade, according to the Centre for Policy Studies (CPS).
Low involvement with international trade among the UK’s small businesses is preventing Britain from tapping into a pool of unrealised growth.
Introducing an “export tax credit” that allows firms to offset spending on exports against their corporation tax liabilities would encourage small businesses to participate in trade.
The credit could be modelled on existing business tax relief schemes, such as the temporary super-deduction and the R&D tax credit, the CPS said.
Businesses “who export are more productive, make more money and pay higher wages than those who do not. If we boost trade, it is the economy that benefits,” Nick King, the author of the report, entitled ‘Trading Up: Supporting UK exports in a post-Brexit world’, and a fellow at the CPS, said.
Read more in City A.M. here.
Date Added: Tuesday 8th March 2022