FOUR in five mid-sized Scottish businesses would consider relocating part of their organisation to one of the proposed Investment Zones to benefit from the available tax reliefs, according to BDO.
The accountancy and business advisory firm’s bi-monthly Economic Economy survey of 500 mid-market businesses found that 84% of Scottish businesses surveyed either had considered moving or would consider it in future.
The two UK Investment Zones in Scotland will be located in Glasgow City Region and the North East of Scotland – the first time the Investment Zones model has expanded outside of England. Two Scottish Regional Economic Partnerships will be established, each receiving over £80 million in targeted investment, tax relief and other incentives over five years.
According to the most recent BDO Economic Engine survey, 38% of Scottish businesses cited the biggest challenge they face for the remainder of 2023 as a decline in demand with customers purchasing fewer products or services due to rising costs. Supply chain issues was also named as the biggest challenge for 38% of mid-sized businesses.
James Paterson, tax partner at BDO in Scotland, commented: “Scottish businesses have repeatedly demonstrated a hunger for growth, despite increasingly challenging economic conditions. It’s therefore unsurprising to see such an overwhelming number of mid-sized businesses say that they would move some or all of their organisation to an Investment Zone to take advantage of tax reliefs and other benefits.
“A move like this would help businesses focus on growth and demonstrate a long-term commitment to the Scottish business landscape. Businesses of all sizes are being squeezed by inflation and the rising cost of doing business. Any incentives that will help take the pressure off – like tax breaks – will undoubtedly be popular, helping to drive business development and encourage entrepreneurialism.”
The UK Government’s Spring Budget 2023 committed to establishing 12 Investment Zones across the UK, including the two confirmed in Scotland. They will be established across the UK based around a university and clusters of high growth industries like advanced manufacturing, life sciences or green industries.
