So there was the “first and last Spring Budget” from Philip Hammond. Announcing that his budget was aimed at making Britain the “best place in the world to grow and start a business” was the order of the day – but whether he delivered that is something else.
Lots was said on making Britain the “Cutting edge of global economy”, and there was plenty of focus on high-tech investment and skills. This was never going to be a huge budget – lots was already announced and plenty is being saved for the Autumn budget. But of what was said, there are some interesting points for startups.
Investment in disruptive technology and science
Following on from the announcement of the “digital strategy” earlier this month, we now know a little more of what the government’s investment in infrastructure will look like.
In a push to get the UK “at the forefront” of disruptive technologies, £230m worth of investment is going into tech such as robotics, biotech and driverless vehicle systems. At this point the money is mainly being aimed at Uni’s, but this could eventually flow through to startups.
In further support, £300m worth of funds are being invested in 1,000 new PhD and fellowship positions in STEM subjects. Again, a lot of investment made into research talent and Uni sectors.
The great 5G golden carrot! They do love talking about this. So the creation of the 5G hub will have £16m in order to put the trial forward. Up until now there’s been a feeling that this is a bit about nothing, but the prospect of better mobile network coverage over roads and railway lines is pretty good!
As it becomes clearer what the advantages of 5G are, we’ll get more excited. If it means better use of IoT, more accurate GPS and what will most likely be a heavy involvement in the evolution of self-driving cars, it would be happy days!.
We’re also looking at a hefty investment into fibre optic networks, which will be receiving £200m.
New higher business rates – and relief for business coming into the tax
As well as a hike in taxes for small independent business people, Hammond announced rises in business rates. The government has already been heavily criticised for their decision on business rates and the effect it’s having on small businesses.
Given most startups are in co-working, this may not be a big issue but if the We Works of this world move to pass costs on, look out!
Reduction of tax free dividends
For investors and businesses run as personal service companies, there’s less good news. While at the the moment someone can claim £5000 dividends from their shares tax free, starting in April 2018 the allowance will be reduced to £2000.
Also, if an entrepreneur chooses not to raise external capital as they plan to be cashflow positive soon, this is a hit.
Simplification of R&D admin
There weren’t any real developments in R&D. In the Autumn statement, the Chancellor announced an additional investment of £2bn in research and development. So he used this budget to accept there is an admin burden and efforts will be made to simplify the process, meaning less paperwork for claims – which is a fine welcome and something we look forward to hearing about in more detail. However, he maintained the tax credits are still globally competitive.
T-Levels and investment in skills and education
A big emphasis on skills saw the government announce plans for a T-Level, a technical qualification. Little is known about this at the moment, but it will likely tie into government plans for academies.
So that’s that
This hasn’t been a budget full of huge surprises or groundbreaking announcements, but the chancellor let us know that we’ll know more in his next budget. But of what was said, it’s probably not great news for smaller businesses. For tech, we’ll see if investment in academia translates into a new generation of founders and business opportunities.
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