Taxing times for Yorkshire

Ian Beaumont, Yorkshire managing partner with BDO Stoy Hayward, said: "Companies in Yorkshire are paying a higher tax charge than North West businesses but the positive news from this is the 34.9 per cent overall effective tax charge is actually a reduction on the previous year. One of the contributing factors to this could be due to a number of significant Yorkshire businesses incurring losses for which they currently have received limited tax relief. If so, this is good news looking forward when the position with the North West could reverse.

Construction has replaced commercial banking as the most profitable sector in Yorkshire, according to BDO Stoy Hayward, with profits increasing by 30 per cent overall and solid performances from Henry Boot plc, Birse Group plc, Shepherd Building Group and Simons Construction.

Overall investment for non-financial institutions in Yorkshire was up sharply – growing 60 per cent to a healthy 2.4bn. A year earlier, total investment was just 1.5bn, but like the rest of the UK, Yorkshire has taken advantage of low interest rates in recent years and businesses remain conservatively geared at 30 per cent. This suggests the region either cannot find enough projects to invest in or is simply too cautious – a concern that may hinder future growth and returns.

Yorkshire staff costs increased by only 1.4 per cent, which is partly due to a fall of some 10,000 employees driven by mergers and acquisitions activity.

Across the region, in the top 150 companies, 522,731 people are employed but wages and salaries appear to be trailing both inflation and national house price increases, and average pay per employee of 20,000 is well below the national average of 23,244.

Looking at what the future has in store for Yorkshire, Ian Beaumont said: "It will important for Yorkshire to capitalise on the renewed confidence in investment by reaping the benefits in increased capacity, capability and efficiency.