techUK calls for SME Digital Skills Tax Credit to boost productivity

8 Oct 2021 03:04 PM

techUK is calling for an SME Digital Skills Tax Credit to boost productivity after the Prime Minister outlined a vision for a high wage, high skill, high productivity economy in his speech at the Conservative Party Conference.

SMEs across the country are at risk of being left behind unless they have access to the digital skills they need to transform their businesses. With a tightening labour market, techUK believes many SMEs will struggle to recruit the talent they need and with rising wage costs, many will say that investing in training is a luxury they can’t afford.

The Chancellor should act now to ensure that SMEs don’t lose out from a lack of digital skills, and instead enable SMEs to become a positive force for change in the skills revolution the country needs. Businesses should be supported to invest in upskilling and retraining their employees.

techUK calls on the Chancellor to build on the Help to Grow scheme and launch a Digital Skills Tax Credit. This would incentivise companies to invest in human capital in the same way that companies invest in physical capital.

The Digital Skills Tax credit is one of seven recommendations set out in techUK’s Fast Forward to Digital Jobs report.

Antony Walker, Deputy CEO, techUK, recently said:

“UK SMEs risk becoming the victims of a digital skills gap without the support of a Digital Skills Tax Credit.

“Driving up wages without driving up productivity through digital skills is a recipe for high inflation. Many SMEs faced with a rising wage bill will feel they have less room to invest in skills when those skills are most needed. The only sustainable route to the Prime Minister’s vision towards a high wage, high skill, high productivity economy is through a rapid upskilling of the UK workforce. A Digital Skills Tax Credit targeted at SMEs would turn a skills crunch into a skills opportunity – boosting productivity and growth. 

“Demand for digital skills is growing across the economy. The lack of digital skills in the UK has led to intensifying competition for talent and upwards pressure on tech salaries. Without help, SMEs will find it increasingly difficult to compete with big businesses for digital talent, making them less competitive at a time when employment costs are going up.

“The Chancellor must help SMEs to boost their productivity through a Digital Skills Tax Credit. This would help SMEs invest in their own skills base at a time when wage costs are going up.”