Businesses in Northern Ireland will increasingly seek to innovate, by increasing levels of remote working and automation, and potentially unlocking tax benefits as a way to recover from the COVID-19 lockdown, a webinar hosted by leading advisory firm Grant Thornton has heard.
The firm’s Chief Economist Andrew Webb told the Looking Beyond COVID-19 webinar that companies were looking at various means to cope with what he said were “signs of a deep and damaging decline” in the economy.
He told business leaders from companies across all sectors viewing the broadcast that analysts expect the economy to contract by between 7 and 24 per cent.
“There is a consensus forming that we will have a deep and immediate decline in economic output. The scale of that decline is unprecedented and one that stretches into the full year,” he said.
“This has far reaching consequences. We will see confidence ebb away as people lose jobs, look to save more, and this all feeds into the financial sector and its appetite to lend.”
Andrew said many companies are now seeking to introduce innovations to boost their recovery.
“Businesses are asking if they need to change their commercial footprint to allow for social distancing or facilitate home working while we are seeing others adapt, such as restaurants now offering click and collect or providing ‘cook at home’ kits to customers.
“Firms may also now push on with plans to introduce more automation.”
Grant Thornton’s Head of Innovation Incentives NI said those companies that do progress with such innovations could avail of tax reliefs that will also significantly improve cash flow.
Eugene O’Neill told the webinar: “In this time of uncertainty, R&D tax credits and other tax reliefs could be an invaluable source of funding for many clients to reduce tax liabilities and generate funds.
“R&D is becoming more widely known and we are seeing more claims but these vary in quality as a lot of claimants have progressed without specialist advice which can lead to the supporting evidence not being correct, and therefore the level of relief secured is reduced.
“We are working with a lot of clients that are changing activities due to COVID-19, adapting to manufacture facemasks for example, or others that plan to invest in robots to automate their workplace to reduce headcount and better cope with a pandemic in the future.
“Companies with such plans should seek specialist advice at the earliest opportunity. By doing so in advance, you could potentially avail of enhanced R&D tax relief of up to 130 per cent.”
Grant Thornton is assisting businesses with a range of practical guidance on coping and recovering from the COVID-19 pandemic, including how to manage debt and restructuring, and advice on how the coronavirus is impacting boards and senior management teams.
For further information, visit https://www.grantthorntonni.com/responding-to-the-coronavirus-covid-19/