Budget comment: blow to technology sector investment
If you are writing on the impact of today's Emergency Budget
announcements on the technology sector, please consider the
comments of Niki Dixon, Head of Technology at Grant Thornton.
Capital Gains Tax
"The rise in Capital Gains Tax (CGT) would appear to diminish
the attractiveness of investing in the technology sector. In this
tighter lending environment, venture capitalists and Angel
investors have been a vital source of funds for both start up and
more established technology businesses. This rise in CGT offers no
acknowledgement of the risky nature of such investments."
Research and Development (R&D)
"The Chancellor mentioned that the Dyson Report recommendations
will be considered as part of the overall review of the corporation
tax regime. Dyson suggested refocusing reliefs on smaller and
hi-tech companies through a simplified system of claims. We have
seen a first step towards this with the simplification of the
intellectual property ownership requirements for SMEs claiming
R&D tax credits. This Budget announced a consultation which
will end in the autumn.
"R&D tax credits are worth in excess of £500m to British
business and we hope the Government seizes the opportunity to
revitalise what has been an important stimulus to investment in the
sector."
Video games tax relief
"The scrapping of proposals to introduce a video games relief is
a huge blow for the sector that has been lobbying for a tax break
for the majority of the last parliament. The games sector is an
important part of the technology sector in the UK and we share the
industry's concern that more generous tax breaks in other countries
will have an adverse impact on attracting investment in the sector
to the UK."
Landline levy
"Dropping the landline levy to fund the roll of broadband access
across the UK is a sensible move which reflects the industry view
that the landline levy would not have raised enough revenue to fund
the roll out of broadband. By stimulating private investment the
Government stands a much better chance of providing a quicker and
more comprehensive rollout of broadband across the UK."
ENDS For further information, please contact:
For further information, please contact: Lisa Ritchie, Grant
Thornton Press Office: 020 7728 2208 or email: lisa.ritchie@gtuk.com
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