Budget 2018: What’s in it for TechCo’s

30th October 2018

Philip Hammond’s much predicted ‘End to Austerity’ Budget was a lot more positive than similar pronouncements of recent years. Although UK growth is still sluggish (predicted at 1.6% for 2018), higher than expected tax revenues have enabled the public purse strings to be loosened. Announcements that will be of interest to technology SME’s include:

  • New UK digital services tax on revenues of tech giants from 2020. Will only be paid by profitable firms that have at least £500m a year in global revenues.
  • Annual Investment Allowance (for eligible CapEx purchases) increased from £200,000 to £1m, for two years.
  • Entrepreneurs’ Relief minimum ownership period doubled to two years.
  • Measures to tackle abuse of SME R&D Tax Credit claims by loss making companies (refund now capped at 3 x PAYE/NIC payment for the period).
  • In 2016 the Prime Minister launched ‘British Patient Capital’, a 10 year action plan to unlock £20b to finance growth in innovative firms. The Chancellor reported that since June 2018 commitments of £124m have already been made from this fund. In a new announcement, defined contribution pension schemes will now be permitted to invest in patient capital (as part of a prudentially diverse portfolio).
  • Corporation tax relief to be reinstated for certain acquisitions of goodwill.
  • EIS rules reformed, to:
    • Require funds to focus on investments in knowledge-intensive companies,
    • Give funds a longer period over which to invest capital,
    • Allow investors to set income tax relief against liabilities in the year before the fund closes.

So, overall, a mixed bag for TechCo’s. What might be of more value, however, is moving the big picture narrative away from the era of austerity. We know from the last recession that the UK economy goes into sit-on-its-hands mode when there is uncertainty, so perhaps now there will be one less reason not to make that progressive business decision. Let’s not spoil the party by mentioning Brexit!



 
Other items in Blogs
 
Jaimie King
19th November 2018 Charities small trading tax exemption to increase

During the Autumn Budget on 29th October 2019, it was announced that the small trading tax exemption limits for Charities is set to increase.   The exemptions apply to Charities who trade outside of their primary purpose. A Charity will not pay tax on trading profits that are a part of the Charity’s primary purpose…

Read More »

Victor Courdelle
19th November 2018 Xero Rapidly Becoming THE Small Business Platform

At Xerocon 2018, held Wednesday and Thursday last week, we heard how the number of Xero Subscribers has now reached over 1.6 Million Worldwide.   Xero’s focus on becoming THE Small Business Platform is greater than ever, with recent market research confirming how users of Xero really do save time, in some cases as much…

Read More »

Ian Piper
19th November 2018 Draft Brexit Agreement: What’s all the fuss about?

So now that we can finally see what Brexit might mean in reality, with the publication of the Draft Brexit Agreement, everyone is still unhappy. After much talk about what we wanted, which was leaving the EU club, whilst cherry-picking retention of access to the Single Market and a borderless border in Ireland, it has…

Read More »

Scott Butcher
16th November 2018 Don’t dwell on your ATED obligations

With only just under 6 months until the 2019/2020 ATED return filing deadline of 30th April 2019. It may be an appropriate time to consider whether your limited company may be obliged to submit an ATED return. The annual tax on enveloped dwellings (ATED) applies to companies which own an interest in a residential property…

Read More »

Matilda Mawson
16th November 2018 New Year, New….. Tax Return

  There are only 76 days until the self-assessment tax return deadline of 31 January 2019. If your return is not filed by this date an automatic £100 penalty will be applied. With the festive season on the horizon it’s easy to push the tax return deadline to the back of your mind, however don’t…

Read More »

Richard Alecock
16th November 2018 Top 5 tips for start-up businesses

Businesses are born in many ways but there are some common considerations for all start-ups. Legal form Consideration needs to be given as to the how you wish to set up and structure your business. If you are going it alone perhaps a sole trader could be the best route or, if there is more…

Read More »