In a departure from previous years, the 2016 Autumn Statement was relatively uneventful. Although in some cases we were given a flavour of possible measures that might be introduced (or at least consulted on), the Chancellor has left us guessing about how and when many of them might take shape.
Instead, the focus of his speech was the broader economic picture: driving national productivity through better infrastructure and greater innovation. For the UK tech sector, this brought some very positive messages. Amongst the policies announced:
- Over £1 billion of investment has been pledged to support investment in full-fibre networks and 5G communications, to be achieved through direct funding and business rates relief.
- Greater government funding of venture capital funds will unlock £1 billion of additional finance, to help start-ups develop independently, without being acquired by larger companies.
- The Department for International Trade will provide £500,000 for fintech specialists and commission an annual ‘State of UK FinTech’ report to help guide and inform investors.
- R&D funding will increase by around 20% per year by 2020/21, to include as-yet-undetermined improvements to the UK’s R&D tax relief system.
For the time being, many of these plans seem to be at the R&D stage themselves, and it is currently unclear how individual companies might avail themselves of any benefits. Details will surely emerge over the coming months and, in particular, we will be watching out for any improvements to the existing, already generous, R&D tax relief system.
Innovation is clearly central to the Government’s agenda, and the message for the UK technology industry, as well as for international tech businesses wishing to set up shop in the UK, is extremely positive. In short, if the ambitions set out by the Chancellor can be realised in full, there are exciting times ahead.
For more information please contact Corporate Tax Manager Robert Harness at firstname.lastname@example.org