Oxford is a fascinating place – a city with a local business landscape ranging from world-renowned traditional education institutions and companies operating within a progressive 21st century economy, writes John Burbedge.
As a leading professional services firm, Grant Thornton operates within this remarkable Oxford space working with start-ups, public sector, and fast-growing entrepreneurial and large established businesses. It is a very wide-ranging and networked economy, “whom we assist by using our own unique supportive network,” said Grant Thornton partner Mark Bishop, when I spoke with him recently.
“It’s a privilege and pleasure to be based here, working with really fascinating clients who are often doing amazing work. Plus, we get to go on their exciting growth journeys, helping them get to where they want to be.
“Oxford has always been a significant market for us, both as a talent pool in building and developing our professional teams, but also because of the really interesting businesses here, particularly from the technology perspective,” explained Bishop. Unsurprisingly, Grant Thornton’s national technology practice, led by Bishop’s colleague Wendy Hart, was begun in Oxford.
Oxford is already one of the world’s leading technology clusters and its city council’s 2050 vision is to become globally recognised as a digital-age exemplar of the knowledge-based economy.
Oxford is also in the top 10 local authorities in Grant Thornton’s recently released Vibrant Economy Index – a distinctive report that delves beyond GDP to take a detailed look at growth and the economy in England across six baskets from prosperity, to sustainability, to health and well-being. For Oxford, four baskets rank in the top 20% nationally, with community, trust and belonging ranking first in England.
Ironically, mirroring Oxford’s landscape, recent Grant Thornton research has revealed a tradition versus progress challenge for UK businesses.
The firm’s Planning for Growth report named the number one barrier to growth for South East businesses as the ‘tech crunch’ – their failure to embrace technology.
Grant Thornton’s research found that South East businesses could be missing out on £10 billion of untapped growth, the UK overall an untapped £72.5 billion – equivalent to an economy the size of Greater Manchester, or growth providing 1.4 million jobs.
“Businesses that don’t embrace technology will get left behind, because others will embrace it and gain a competitive advantage,” warned Bishop. “And, there are some huge societal problems that can only be resolved through technology.
“It’s also absolutely fundamental to embrace technology today because people want to work more flexibly and manage their lifestyles, and technology itself is enabling that,” added Hart, highlighting the ongoing workstyle revolution.
Quoting from the report, Hart added: “More businesses see technology as a significant barrier (47%) than those that see it as a growth accelerator (34%). With so much potential in the region, cracking the ‘tech crunch challenge’ must be a key area of focus for the South East’s businesses.
The first companies to tech-enable their businesses tend to be market disruptive and see uplift in their perceived value. A clear management understanding of what they are seeking to achieve through technology application, be it back-office or customer-facing systems, also ensures a clear brief to technology vendors and consultants, reducing the risk of expensive mistakes.
“Seeing technology as a core part of business strategy and not a cost centre is a first step in embracing its potential to unlock growth, and one which can pay swift dividends.
“One way that technology can be transformative is in facilitating a revenue model shift.” Hart exampled cloud technology assisting the move of software businesses from a traditional licence fee and maintenance model to software as a service (SaaS).
CASE STUDY: Supporting a growth journey
After a highly successful research and development stage, a local, leading technology business had started commercialisation and anticipated a period of rapid global growth having already secured customers in the US and Far East.
Operating in a fast-paced environment, the client needed to make quick, informed decisions. With significant future global profits in the pipeline, it was essential to ensure that the group had the correct infrastructure in place to manage its global effective tax rate, and ensure a robust and transparent tax strategy. All while meeting international standards and ensuring they would withstand future due diligence.
Using vast technology sector experience and a holistic approach, Grant Thornton’s team worked with the group to identify the essential foundations and prioritise what would be needed later on. Transfer pricing for the US operations was a priority – an area of increasing scrutiny. The team identified a suitable policy to protect the group’s UK and US R&D reliefs, while ensuring it was ‘patent box’ ready.
Grant Thornton made sure the client always had access to its senior team in order to provide pragmatic, real-time advice, particularly important on occasions such as agreeing terms to the Far East partner. For example, a brief call identified a potential risk that could have led to losing significant annual cash credits. The team were able to help the client arrive at an alternative well within its commercial parameters.
With ever-growing international activities, the benefit of Grant Thornton’s International member firms was invaluable in bringing together expertise from around the globe. Regular calls with the UK tax manager also meant the group’s management team could be confident that all projects were being prioritised and progressed as needed.
So, how has this helped?
Successfully managing R&D claims led to significant cash repayment in £millions. Grant Thornton leveraged its experience to advise on the most practical approach to pragmatic international tax risk management. This means the client can have confidence that it is future-ready. The team’s holistic approach meant opportunities such as transfer pricing, R&D and patent box reliefs were all considered alongside the impact on other taxes. A pro-active and responsive team prioritised advice on what was required urgently, with an understanding of what would be needed further down the line, leading to successful implementation of robust compliance across the different regions.
‘A distinctive and charming economy in which to work as a proven and trusted friend on exciting journeys’
“Our firm’s purpose is all about helping to shape a vibrant economy by assisting dynamic fast-growing businesses to unlock their potential for growth, and in and around Oxford we are surrounded by such businesses,”
Long-standing local knowledge and experience, professional skills, business understanding and wide-ranging Thames Valley and international connections underpin the Oxford office’s full-service ability to help tackle problems and opportunities that clients encounter, says Bishop.
“While every client’s business journey is unique, as business advisers we have gone on many similar journeys. The most powerful thing I can do is to use my sector knowledge, network and experience, our Grant Thornton skills and international links, to provide absolutely the right person or solution for my client,” said Bishop. But, he is clear that Grant Thornton will never drive the key decisions made in a client’s business. “We can take away all the complexity of tax and accounting standards and so on, but our main role is to be a trusted, knowledgeable and constructively critical friend, enabling clients to control what they can and forge their own destinies.”
An innovative collaboration space for you?
Grant Thornton is inviting local organisations to come in and use its dedicated connectivity and working space. Collaboration, networking, and face-to-face meetings are important factors for innovation and creativity in any business community.
Grant Thornton’s ‘Powwow’ space is available at no cost to local business professionals to use – whether it is for an hour or a whole day, to host a meeting, make a quiet call or take a pit-stop between meetings. It is ideal to hold a sit down or standing boardroom style meeting, and there are booths available for a quick catch up. You can expect WiFi, a great cup of coffee and a warm welcome. Plus, their exclusive events provide the opportunity to connect with local networks and experts from the Grant Thornton team.
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