Businesses who deferred VAT payments due to HMRC between 20 March 2020 and 30 June 2020 can opt into the new scheme between 23 February 2021…
In the autumn, Lloyds Bank published their fourth annual survey of the food and drink sector in England and Wales, presenting a snapshot of the industry today, alongside thoughts on the opportunities and challenges food and drink producers face.
As an overview of how important the sector is to the UK economy, food and drink businesses:
- employ more than 400,000 people; and
- contribute some £28bn to the economy – making it the UK’s largest manufacturing sector.
The key findings of the survey include:
- 48% of the firms stated business confidence had increased since the Brexit vote with a further 22% stating confidence was the same as pre-Brexit.
- 57% of respondents are looking to develop new products and 68% are looking to enter new markets.
- 33% of the firms surveyed called on government to ‘provide incentives to encourage growth’. I think this is disappointing given the availability of incentives such as R&D tax credits and grant funding from the Rural Development Programme for England (RDPE) – but perhaps not unexpected given the bureaucracy involved in submitting a RDPE grant application!
- Almosthalf of the businesses identified rising labour costs as their biggest challenge, almost doubling the response from the 2016 survey. Conversely, the number of new jobs forecast in the next five years has increased by 27% to 95,000.
- Migrant workers represent 38% of the workforce – how Brexit will be achieved will obviously impact heavily on the sector.
- Similarly, Brexit was viewed as the biggest threat to supply security with nearly half of the respondents importing fewer raw materials due to the weakness of sterling.
- Improving productivity to increase competitiveness was acknowledged as being vital – in line with the Government’s Industrial Strategy – with proposed actions including streamlining processes, supply chain efficiencies and collaboration with other organisations.
- Regulation and red tape reared their ugly heads again with a doubling to 37% of respondents seeing these as major challenges.
- Although only 20% of food and drink companies currently export, 28% of the respondents are planning to commence exports in the next five years, which will be key in maintaining the ongoing growth in food and drink exports (according to the Food & Drink Federation in the first 9 months of this year exports increased 11.0% to £16.1bn against the same period in 2016).
For further information, a full copy of the survey can be found here.
In summary and to quote the survey – the sector is ‘gaining confidence’ with ‘companies moving on from Brexit and re-focusing efforts on achieving growth and increasing confidence.’
Our winter 2017 Food & Drink newsletter picks up some of the themes highlighted in the Lloyds survey, particularly the ability of food and drink businesses to attract R&D Tax Credits and grant funding. It also includes an article on what we are doing to help our clients reduce the risk of cyber crime, a challenge not identified by the survey, but which is prevalent across the sector.