Budget 2017

9th March 2017

What’s in it for Technology Companies?

Philip Hammond’s first Spring Budget announced a handful of steady-as-she-goes measures. The new announcements that will catch the eye of technology companies include:

  • From 6-Apr-18, the tax free allowance for personal dividend income will reduce from £5k to £2k pa,
  • For tax advantaged share schemes:
    • clarifying the EIS and SEIS rules for share conversion rights,
    • providing additional flexibility for follow-on investments made by VCT,
    • introducing a power to enable VCT regulations to be made in relation to certain share for share exchanges, to provide greater certainty,For tax advantaged share schemes:
  • Specific new provisions to the revised Patent Box rules, covering the case where Research and Development (R&D) is undertaken collaboratively by 2 or more companies under a cost sharing arrangement.
  • Administrative changes to Research and Development (R&D) tax credits, following a review of the tax environment for R&D. This will increase the certainty and simplicity around claims,
  • Tackling the workforce skills shortage by introducing new:
    • T Level qualifications (on a parity with A Levels),
    • Further education maintenance loans,
    • Trial projects that encourage lifelong up-skilling training
  • Capping the increase in business rates, as small business rates relief is withdrawn in 2017-18, to £600.

Overall, the tech industry will probably greet these announcements in a subdued manner. It is immediately clear that the over-riding strategy remains to balance the public finances (target date now extended to 2025), so there are no big ‘give-aways’.

Blog entry by: Ian Piper.

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