Medium-sized British businesses created 780,000 jobs in 2016 and increased profits by 19 per cent, according to new figures released by accountants BDO in a report into the sector’s growth prospects.
The increase was a striking improvement on annual profit growth between 2011 and 2015, which averaged less than one per cent a year while jobs increased by 500,000.
Businesses with a turnover in excess of £10m and £300m outperformed firms in the FTSE 350, where profits contracted by almost a quarter last year. They also fared better than the small companies which faced profit declines of 26 per cent.
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Medium-sized businesses make up just 1.5 per cent of UK businesses but contribute a third of the economy’s turnover, according to the new report.
Championing the interests of the medium-sized firms BDO works with, the report calls on policymakers to reduce red tape and simplify the tax system to help businesses thrive in the wake of Brexit.
Stuart Lisle, a senior partner at BDO, explained: “Mid-cap companies get all of the complexity and none of the support, as they don’t have the resources to plough through tax legislation or the government assistance afforded to smaller firms. Many of our clients would be happy to see an increase in the effective rate of tax in return for simplifications to the legislation.”
Additional new research out today from management consultancy CIL revealed a third of medium British businesses are looking to the US for post-Brexit expansion. The country already receives 20 per cent of UK exports, worth some £45bn a year.