Following the Chancellor’s Autumn Budget 2017 update, Menzies Technology sector team have reviewed the impact of Philip Hammond’s announcement upon the UK business services community.
Autumn Budget 2017 comments provided by Will Sweenery.
The importance of the technology sector formed one of the central themes of Chancellor Phillip Hammond’s budget speech today, with the announcement of a further £2.3bn of investment in R&D as the first part of their efforts to drive up R&D investment across the economy to 2.4% of GDP.
Part of this £2.3bn will go towards raising the rate of the R&D Expenditure Credit by 1% to 12%.
There was some good news for those seeking investment as the Government plans to incentivise investors to put their money into technology companies by doubling EIS investment limits for ‘knowledge intensive’ companies – while simultaneously ensuring that EIS relief is not abused as a low risk shelter for capital preservation schemes.
There were also additional funds announced to support research and the development of infrastructure for electric cars, AI, geo-spatial data, FinTech and video game development.
The news is less good for tech multinationals as the Government plans to introduce Income tax on Royalties paid on UK digital sales from April 2018 until such time as the international community can reach a fair agreement on how to tax the digital economy. This has the potential to impact our clients with genuine reasons for making international payments and so we will be monitoring carefully how the government plans to introduce these charges.
Get more input on the Autumn Budget 2017 implications for the Technology sector by speaking to our sector team.
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