Both national and local government in the UK have sought to make investment into certain geographical areas as attractive as possible. This is sometimes conducted on a region-wide basis but, more often than not, government schemes and tax incentives are focussed on a particular industry sector or city. A good example of the sort of thing that goes on when it comes to attracting new businesses to a city is Manchester which has had much success in recent years. Not only has Manchester’s economy thrived in comparison to other cities in the northwest of England particularly, but it has attracted overseas investors and regional headquarters from other locations in the UK that might compete, not least Birmingham and London. On occasions, the incentives on offer in Manchester have lead to inward investment from globally-based businesses which could have set up their operations anywhere in a European or Middle Eastern time zone. So, what are the schemes and opportunities that attract some of the leading regional and global players to Manchester?
- So many business industries can be found and established in Manchester
Manchester as a Part of the UK Drive for Investment
In the course of the last four or five years, Manchester – being a part of the wider UK economy – has benefited from overseas investors attracted by the relatively low tax regime. The corporation tax that Manchester-based businesses pay is set by the Chancellor of the Exchequer as a part of national government policy. According to Her Majesty’s Customs and Revenue, the small profit rate of corporation tax has been low compared with other countries. This means that some businesses have chosen to make their headquarters in the UK, despite conducting most of the business abroad. In order to do this, a company must register in the UK and have its head office function carried out in the country.
With access to some excellent graduates in Manchester, which has several seats of higher education, it is relatively simple to find the executives who can perform the necessary business functions to claim the low UK corporation tax rate, without having to relocate the entire workforce. By being a part of this competitive tax set up, whilst still providing a highly educated administrative pool of talent, the UK as a whole – and Manchester especially – has reaped significant rewards.
Manchester Gets Connected
In the global business world, super-fast internet connections are a must. Mobile technology has simply sped up the way in which many corporations do business. In December 2013, the UK government announced that Manchester would benefit from a £100 million project to increase the inter-connectivity of regional cities. Salford – a suburb of the city, already being redeveloped as a high-tech centre by the BBC and others – and the city centre itself were specifically named in the project which is to be funded by the Department for Culture, Media and Sport. Under the scheme, small and medium enterprise (SMEs) in the city will be able to apply for government grants to the tune of £3,000 in order to cover the costs of installing faster and better broadband services.
For Manchester-based businesses that are seeking investment from people who are already based in the UK, the government also has some programmes that have proved successful. A prime example is the Seed Enterprise Investment Scheme (SEIS) which is one that a number of Manchester’s start up business owners have found beneficial. Under the government led investment programme, people looking to invest in Manchester’s nascent business community are afforded up to fifty percent tax relief and all that is required is that they demonstrate that they are investing in a genuine start-up business. According to the SEIS programme, officials ensure that the investments are made into bona fide businesses and anything up to £100,000 of investment is subject to the tax relief which encourages the investment in the first place. According to the government, SEIS is one of the most generous early stage tax breaks that can be found anywhere in the world, let alone Manchester.
The local body responsible for attracting businesses to Manchester is known as MIDAS. They have recently been in partnership with big names like Aegis and IBM. MIDAS has a particular focus on growth areas such as running a Manchester-China business forum and a similar one dealing with the biomedical and life sciences sector. According to MIDAS, they can help relocating companies with their premises and offices solutions as well as helping to provide key business services, such as accounting and recruitment. Helping businesses to collaborate with the universities in the region is one of the key services that many new investors to the region report is of particular benefit.