Concentrating solely on the measures which might affect the tech industry, there was much to like in the Budget today.
We are all affected by the general economic climate. So the revised growth rates presented in the Budget were welcome as at least they did not indicate any further declines. However, the forecast growth rate of 0.8% this year and 2% in 2013 are hardly exciting. A period of stability is what many need now.
Every business will benefit from the further reduction in Corporation Tax rates and the intention to see the rate down to 20% by the next Parliament. That’s one of the lowest rates in the developed world and might just encourage more global tech businesses to choose the UK as a base.
Clearly, the move to ultra fast broadband in 10 UK cities is to be welcomed. Although I’d settle for ‘superfast’ (or even ‘fast’) here in Farnham. As home/teleworking grows, we need decent internet connection speeds everywhere – NOT just in Cities.
Anyone who, like me, wants to see wider employee share ownership will welcome the doubling of the EMI grant limit from £120k to £250K. Also the OTS is looking at a wide range of other ways of simplifying employee share schemes. Long overdue. They are fiendishly complex and restrictive at the moment. Not so sure about the reduction from £10m to £5m in the investment limits for the EIS scheme though.
Small/start-up businesses will be helped by a simplification of their taxes so they are paid on cash received. Also I liked the Enterprise Loans to help individuals (particularly the young/unemployed) setup their own businesses. Well, “I would say that wouldn’t I” as that’s pretty much what the Prince’s Trust has been doing for 30 years. But, of course, their loans come with an all-important mentor too!
Huge boost to the Creative Industries as Tax Credits extended to TV, animation and video games from Apr 2013. You may remember that the video games industry was up in arms about the reversal a couple of years back. Just shows that lobbying works (sometimes…) Maybe it should be extended to general software too?
As we all know, the SIs that make up so much of TechMarketView’s client base also rely on public sector IT. The one way IT suppliers have found to balance out the reduction in the annual value of their largest contracts is by winning add-on business related to the implementation of new government policy. This budget won't have disappointed in that sense, bringing plenty of scope for project work around, for example, tax avoidance and evasion, stamp duty, personal tax statements, corporation tax, and many other quite major changes. Indeed, ‘tax simplification’ will (perversely) require IT system changes too!
Although the budget was pretty much neutral, it was business-friendly. It took from the ultra-rich (who will barely notice) and gave some of it to the poor. Who can argue with that?