As you may well be aware, today George Osborne, our esteemed national purse holder, has made his Autumn Statement to the House of Commons and the country.
And it consisted of a little more than: “My, hasn’t it been warm for this time of year”. Indeed, Osborne’s centrepiece was a shake-up of stamp duty, with the promise of a fairer system which will use a gradual rate of tax, that will leave the vast majority of us (98 per cent) paying less when moving house.
But what about the announcements in terms of the business and tech arenas?
The Beeb notes that the so-called ‘Google Tax’ on multinational firms has been proposed by Osborne, which is a 25 per cent tax on “diverted” profits – in other words those profits which are shifted abroad in order to avoid paying tax in the UK. The new Diverted Profits Tax is expected to rack up over £1 billion during the next 5 years.
There will also be a review of high street business rates, with Osborne aiming to make things a little easier on bricks-and-mortar retailers when it comes to their overheads, and competing with internet-based businesses. Small business rate relief will be doubled for another year, though Matthew Finnie, CTO of Interoute, told us that this isn’t enough to boost innovation in British businesses.
Finnie observed: “The Government has simply got to get better at supporting British business innovation, particularly in those businesses suffering in the face of higher business rates. The Autumn Statement will do little to reassure businesses that the Government really understands what building a private business needs.”
“Compared with the US we are still way behind in practical measures that allow people starting companies to preserve cash when they need it; which is when they are developing their product, investing in people and promoting their idea.”
He concluded: “Business rate relief is a small start but needs to be widened to include income tax even before you take the leap to start your business. Cash preservation is king for starting a business.”
Osborne also announced that he is increasing the R&D tax credit for small and medium businesses to 230 per cent, and the credit for large organisations to 11 per cent.
TechUK, the industry body for the tech sector, told us: “Innovation is key to growth and the government is right to encourage SMEs who invest in R&D through supercharged tax credits.”
“We also welcome the government’s initiatives to reverse the decline in UK students undertaking STEM masters courses and the new £45m programme to encourage new companies exporting for the first time – both of which we called for in our techUK manifesto.”
However, on the downside techUK observed: “The missed opportunity of today was the failure to provide greater backing of the UK as a world leader in the Internet of Things (IoT). This will be the next internet revolution. Countries like China and India are now outpacing the UK in the race to seize this £4.6trn opportunity. We call on the government to look at this issue again.”