There were some positive announcements for the technology industry in the 3 March Budget Announcement, including fast-track visas and a ‘super-deduction’ for capital expenditure. However, commitments to helping move businesses online and green technology were fairly modest.
Our technology team has produced a commentary article covering the key announcements, along with their thoughts on their impact, which you can find below.
Fast Track Visa
The introduction of a new fast-track visa is a helpful announcement from the Chancellor to support the technology industry. Due to the mobility of the industry and ability to raise finance in many parts of the world the Government needs to ensure that the UK is an attractive place to invest. Reducing immigration barriers can help bring technology experts to the UK but financial support and further learning and development support are needed.
Future Fund breakthrough
The Future Fund Breakthrough is targeted at businesses looking to raise over £20m and while investment in ‘highly innovative companies’ is the right path, the Fund size of £375m means this will be limited to a relatively small number of beneficiaries. Greater incentives to invest in smaller technology businesses were not forthcoming and there remains a risk that sufficient private capital will not be unlocked to support these companies. A review of the Research & Development (R&D) tax reliefs was announced intended to ensure that the UK remains competitive for cutting edge research, though at the same time the SME R&D tax credit relief claim was capped at £20,000, plus the total PAYE and National Insurance Contributions (NIC) liability.
Training and skills
Training and access to expertise is one of the biggest barriers to small businesses moving online. Free access to training and discounts on productivity-enhancing software were welcome announcements but introducing software is only part of the solution. Company management need local authority-led guidance on the capability of technology to grow their business, helping guide them on the skills their future workforce will need and access to training and apprenticeship schemes to support this need. Announcements on existing training schemes and enhancements to business support on hiring apprentices were fairly modest and it is not clear how they will be focused on supporting the shift to digital working.
The ‘super-deduction’ for capital expenditure from April 2021 is a boost to the Technology industry and it should entice cash-rich businesses in other sectors to update their infrastructure and enhance their systems. This represents an opportunity for technology businesses with established hardware to market them over the next two years. In addition, technology consultants will see opportunities as new companies adopt modern ways of working requiring changes to the skills that businesses require.
Investment in Green Technology was disappointingly low. The total amount announced to develop offshore wind, long duration energy storage and biomass feedstocks programmes was less than the £135 million announced to upgrade the A66. The Prime Minister’s 10-point Green Recovery Plan announced last year was intended to place the UK at the forefront of the green economy but it is clear that the hope is the private sector will fund its development. This economy is growing rapidly and countries that lead the way in green technology investment will develop knowledge that can be exported as the demand for sustainability increases. More support is needed in this area.
Would you like to know more?
If you have any questions or would like to discuss your specific circumstances, please get in touch with your usual Blick Rothenberg contact.
You can also visit our Budget Hub, where you can find our commentary and a range of tools to help you better understand how the Budget may affect you.