We are undoubtedly living in challenging times and, while it has been heartening to see a rebound across the UK’s services sector in February and new optimism that the country might avoid recession in the first half of 2023, many businesses are still grappling with staff shortages and spiralling energy bills.

A recent survey by the British Chambers of Commerce reveals that four out of five firms are struggling to recruit staff and that the sectors most likely to feel the challenge are hospitality, manufacturing and construction – all chief in our region. With the National Living Wage set to rise to £10.42 from 1 April, an almost 10 per cent increase of 92p, the pressures on local employers to afford and ensure that their businesses are manned with skilled operators are compounded, forcing many to make hard decisions about their continued ability to trade.

One potential solution which has received little attention is the Chancellor’s current Capital Allowance Super-deduction Scheme, which runs until 31 March and offers 130 per cent tax relief on expenditure on eligible plant and machinery. In effect, this allows companies to cut their tax bill by up to 25p for every pound they invest and could be a superb opportunity to retain more profit and cash reserves to weather the current storm.

Investment in equipment could increase automation, reducing the pressure on recruitment while boosting efficiency and productivity. Automation is sometimes viewed negatively, yet often the reality in many situations is that it leads to the development of employees’ skillsets and the creation of new jobs as a business grows. If funding an investment is a challenge, asset finance can often bridge the gap, protecting a business’s cash reserves and spreading the cost over the long-term.

This really is a case of ‘use it or lose it’, as the super-deduction scheme will only apply to eligible investments made by 31 March and, while the Chancellor may announce future tax-saving opportunities in his Spring Budget on 15 March, taking advantage of the opportunity now could save many businesses in our region from many hours of needless worry.