Over two months on from the Brexit deal, and as the UK tentatively looks forward to the end of the pandemic, it feels as though UK manufacturing is on the brink of a new era. While this is exciting, and reasons for optimism can be found, it will not be without new challenges as the chancellor unveils his ambitious plans to claw back some of the hundreds of billions of pounds spent in the pandemic while simultaneously stimulating growth.

Interflex MD Jim Griffin takes a look at what the measures announced by Rishi Sunak in the March budget means for the UK manufacturing industry.

The extension of furlough

The announcement that the furlough scheme will be extended until September 2021 is great news for businesses who have survived the pandemic up until now, but without the government’s help in paying 80% of staff wages (70% in July and 60% in August and September), may struggle to get through this summer.

Here at Interflex, we were able to bring back most of our workforce in May 2020, before the first lockdown ended, partly due to our decision to diversify into the production of PPE. However, not every manufacturer has been able to diversify or regain production close to pre pandemic levels. For this reason, the extension of the Coronavirus Job Retention Scheme comes as good news for the manufacturing sector in the run up to the full reopening of the economy.

Incentives for apprenticeships

Opportunities for young people will be key to the recovery of the economy as a whole and this is particularly true for the manufacturing sector which has traditionally relied on the apprenticeship system to train young employees to be the skilled workforce of the future.

So it’s great news that the Chancellor has pledged £126 million of new funds to facilitate 40,000 new traineeships and double the cash incentive for firms who take on an apprentice. Taking into account the current grant payments available, companies will now be entitled to £4,000 for employing an apprentice under the age of 19 and £3,000 for older apprentices. Hopefully, this new incentive will encourage more firms to provide jobs for young people following the inevitable decline in new apprenticeships caused by the pandemic.

Tax super-deduction

The government hopes that the new super-deduction on corporation tax which will come into effect at the beginning of April for two years, will give businesses the confidence and the reserves to invest cash in new equipment now rather than waiting to see what the short-to-medium term future holds.

This stimulus designed to increase investment and spending, will provide 25p off company tax bills for every pound of qualifying spending on machinery and plant. The fact that companies will get 130 per cent first year tax relief on qualifying purchases, meaning that companies can receive a corporation tax deduction of £130,000 for a £100,000 spend, means that firms have a great opportunity to invest in the equipment needed to survive, innovate or diversify.

However, some businesses will still not be in a position to make use of this incentive; and those that can must carefully weigh up whether their purchase makes economic sense at this precarious time.

2023 and beyond

As we know, the corporation tax super-deduction is a precursor to the rise in corporation tax from 19 per cent to 25 per cent in April 2023, which along with the freeze in income tax thresholds, is a measure to try and regain some of the hundreds of billions of pounds spent during the pandemic.

Although a 6 per cent rise is significant, the government estimates that 70 per cent of businesses will be unaffected by the changes as the rate will remain at 19 per cent for companies earning profits of under £50,000, with a tapering system leading to the £250,000 figure where companies will be required to pay the full 25 per cent.


In the Budget, Rishi Sunak also announced eight new freeports in England, where the usual tax and custom rules will not apply in an attempt to make it easier and less costly to do business. The companies located inside these maritime and airport sites, chosen in locations identified as needing economic stimulus, will also be offered tax breaks. Although some business owners and politicians cast doubt on the ability of freeports to stimulate growth, hopefully they will achieve their aim of boosting the manufacturing industry by creating jobs and investment in the areas that need it most.

Innovation in manufacturing

Like most experienced business owners in this sector, I have learned that resilience is key when dealing with the many curveballs that are regularly thrown at us. Although Covid-19 is undoubtedly the biggest challenge that most of us have ever faced, I remain optimistic that not just survival, but a bright future is an achievable goal for many UK manufacturers.

For more information about the products Interflex supply, including NVH and sealing solutions for vehicles including door seals, interior trim, under carpet and boot seals, please call us on 01949 861 494 or email sales@interflex2000.com.