Today, George Osborne delivered the first complete Tory budget since 1996. Following pre-election vows to make the UK the “technology centre of Europe” and a Conservative pre-election manifesto packed with tech content aplenty, expectation from industry was high. Although the jury is still out on the overall benefits to the tech sector, there are certainly a few sweeteners for business. At Delany & Co we’ve been looking at what this Budget means for the innovative technology space and have pulled together a quick tech summary:
Productivity is the buzzword but not a whole load of tech:
Whilst the March budget was ram packed with support for the Internet of Things, the sharing economy and driverless cars, today’s budget was thin on the ground when it came to further tech commitments. This is partly because of the focus on other major policy challenges (including welfare and tax reform) and partly a consequence of the Government’s ‘Productivity plan’ promised for the end of this week. In the plan, Osborne will outline a package of measures designed to tackle poor productivity and boost the nation’s output when it comes to technology, science and innovation.
In some great news for business, Osborne pledged to cut the National Insurance bill by another £1,000 from April 2016, with the employment allowance increasing from £2,000 to £3,000 – meaning small businesses will be able to employ four people full time on the national living wage, paying no NI at all. In order to support SME’s, the Annual Investment Allowance has also been set at £200,000 this year and after. A further boost for businesses saw the level of corporation tax set to be cut to 19 per cent in 2017, and 18 per cent in 2020. It is estimated that over one million businesses will benefit from this move. Osborne said: “We’re giving businesses the lower taxes they can count on, to grow with confidence, invest with confidence and create jobs with confidence.” At the same time, a new apprenticeship levy on big business and the abolition of maintenance grants in favour of loans for university students, will also help to boost the skills base.
Good news if you live in the south west:
The pledges to allocate an additional £10 million to fibre rollout in the South West of England, to fund local projects, with priority given to those that can deliver 100Mbps or faster was welcomed by industry.
The rise of Digital Economy Centres
Nationally, the government committed to investing £23m in six “Digital Economy Centres”: in London, Swansea, Newcastle, Nottingham, York and Bath. “These centres will exploit opportunities across sectors of the digital economy including the creative industries, finance, healthcare and education.” Delivering on their manifesto pledge proposals will shortly be made on “catapult centres” which will focus on bringing together businesses, scientists and engineers to help commercialise new technologies.
Government ‘Digital Transformation Programme’
As part of the delivery of the Digital Transformation Programme, the Budget confirmed seed funding for the Cabinet Office to generate a series of innovative business cases with the aim of delivering “redesigned, user-friendly public services, fit for the digital age, as well as delivering efficiencies across the public sector.” This appears to be in reference to the GOV.UK website and the Government Digital Service and is a welcome step towards the realising the Government’s ‘Digital Transformation’ ambitions.
ISA’s and Crowdfunding
In the Autumn Statement of 2014, the Chancellor announced that the government would consult on whether to allow crowdfunded debt securities to be eligible for inclusion within Individual Savings Accounts (ISAs). Today’s budget extended this consultation to consider whether equity investments offered via crowdfunding platforms should also be included in the list of ISA-eligible investments. This announcement follows confirmation of the introduction of the Innovative Finance ISA, for loans arranged via a P2P platform from next April.
Supporting the sharing economy
Following on from the commitment in the last Budget to develop “a package of measures to help unlock the potential of the sharing economy”, a rent-a-room tax relief (a tax free allowance for income generated from renting out part of a residence) will be increased from £4,250 per year to £7,500 per year from next April. Although only relevant to those sharing homes, it opens up the way for exemptions for other types of sharing economy activity further down the line.
Photo Credit: Alamy