Government is urged to support ‘overlooked’ mid-market to boost UK growth

THE GOVERNMENT must put the “high-performing but overlooked” UK mid-market sector at the heart of plans to rebalance the economy, professional services firm BDO has urged.

Research from BDO found British firms with between £10m and £300m turnover grew revenues by almost 55 per cent in the last five years to £1.02trn.

Yorkshire’s mid-sized firms outperformed their national peers, adding 80 per cent to turnover in the same period, with revenues of £64bn in 2014.

According to BDO, the UK midmarket has outstripped the FTSE 100 in many key performance areas, including jobs growth, which is almost three-times faster than in large companies.

BDO called on the Government to make changes to tax and investment structures to allow midmarket firms to plan long term.

Charging zero VAT for supplies to exporters and reducing overseas tax barriers for exporters would help businesses grow internationally and attract inward investment, it argued.

Terry Jones, partner and head of BDO LLP in Yorkshire, said the mid-market currently falls into a “policy and profile gap” as companies are too big to benefit from policies aimed at small businesses and too small to attract the attention enjoyed by the FTSE 100.

He said: “Now that we are on the road to recovery, it is essential that we do not repeat the mistakes of the past and perpetuate an unbalanced economy too heavily reliant on one sector or region.

“The Government has started tackling the issues and plans around the Northern Powerhouse, devolving powers to cities and infrastructure investment are all very welcome.

“More can be done though, and encouraging Britain’s mid-market has to be at the heart of Government plans.

“We would like to see a ‘new economy’ that harnesses the entrepreneurial spirit of UK businesses and puts the mid-market front and centre of the UK’s growth plans.”