Autumn Budget: Manufacturers call on tax simplification to boost UK productivity
Ahead of the Autumn Budget, Mike Thornton, head of industrials at leading audit, tax and consulting firm RSM UK looks at:
- Simplifying tax incentives to unlock further manufacturing investment.
- Budget uncertainty dampening investment confidence.
- Enhancing supply chain resilience to safeguard UK manufacturing.
- Boosting productivity through innovation and upskilling.
Mike Thornton comments: “We know that the Industrial Strategy has already brought significant change to the manufacturing industry, with over a third of UK firms planning to accelerate investment. But, against a backdrop of weak demand and sustained market contraction, manufacturers need to shift the dial from resilience to growth-driving, boosting productivity through innovation and targeted support in the Autumn Budget. Sentiment around tax hikes and spending cuts is dampening business confidence and so the industry cannot afford any further shocks. Although not imminent, the government’s commitment to cut electricity costs from April 2026 offers a welcome step toward easing the burden for energy-intensive businesses like manufacturers, signalling that rising energy prices are finally being recognised as a critical barrier to growth.
“Notwithstanding headwinds, businesses remain cautiously optimistic that the government will safeguard vital investment incentives to stimulate further growth. However, simplifying tax reliefs is essential to unlocking investment across the sector. Our latest survey, conducted in partnership with Make UK, reveals that nearly 40% of manufacturers make investment decisions based on the availability of tax reliefs. A tax system that is stable, accessible and easy to navigate will not only boost investment, but also drive innovation, enhance productivity and accelerate economic growth.”
He added: “Recent global trade conditions have led to greater fragility in the supply chain, so manufacturers must continue to strengthen domestic capabilities and embrace new technologies to mitigate risk, improve efficiency and ensure continuity. While the UK’s advanced manufacturing sector is a world leader in innovation, it has been slower to adopt digital technology. Targeted funding and upskilling initiatives such as the Made Smarter Adoption programme will be key to helping firms modernise operations, bridge labour gaps, scale up and remain globally competitive.”