The first fully-fledged Conservative Budget in 18 years was delivered this afternoon but there wasn’t an awful lot in it for the UK tech sector.
Chancellor George Osborne made his statement to the House of Commons but he failed to pay anywhere near the same amount of attention to technology and innovation as he did in his March Budget, where he spoke of IoT, the sharing economy and driverless cars.
Guy Levin, executive director of tech trade body Coadec, which aims to support startups, said: “The Chancellor's continued support for business is welcome, but there is little new in the Budget for digital startups.
“While there were a couple of interesting announcements, including looking at making crowdfunding ISA-eligble, we hope there will be more in the Productivity Plan this Friday. This Chancellor has an excellent record backing the UK's digital innovators, but it is important that we do not lose momentum.”
Kassem Younis, CEO of digital startup Mana added: “It is unbelievable that there was not a single mention of the UK technology sector in today’s Budget. Given that the tech sector is estimated to contribute around £100 billion to the British economy, and it is expected to surge to a growth rate of 11 percent a year, it is simply mind-boggling that Chancellor George Osborne didn’t mention this now, critical, sector in his Budget announcement today. It is shortsighted and disappointing not to see this industry, which is a world leader, being given clear policies that support it."
While some were clearly unhappy, a number of small announcements were made around the sharing economy, tax, digital centres and the national living wage that could have a positive impact on the UK tech sector.
Tax relief for investors
The changes include: a new £20 million cap on the total risk finance that can be raised by a company under EIS or VCTs; an increase in the employee limit for knowledge intensive companies to 500 employees; and a new digital process for companies and investors using SEIS, EIS and the Social Investment Tax Relief (SITR) by the end of 2016.
Alongside the Budget, the government also published a full response to a consultation it held around EIS and SEIS, which delves deeper into the proposals.
Tax cuts for sharing economy
The Rent-a-Room tax relief (a tax free allowance on income that's generated by renting out part of a property) has been increased from £4,250 to £7,500.
Debbie Wosskow, founder and CEO of Love Home Swap and Chairman of SEUK, the UK's sharing economy [SEUK] trade body, said: "Today's Rent-a-Room relief increase is great news for individuals wanting to make money from their spare bedrooms.
"For SEUK, these sorts of changes tie in to the spirit of the sharing economy, in encouraging a nation of micro-entrepreneurs.
“That said, whilst it's great that barriers have been removed, there is a still a long way to go. The last change to this relief was in 2005 and we don't want to wait another decade for it to be increased again. It would also be great to see such a tax relief extended to other verticals of the sharing economy - such as driveways and household items, like power tools."
Digital economy centres
The government will invest £23 million in six "Next Stage Digital Economy Centres". The money will go towards developing centres at UCL, Swansea, Newcastle, Nottingham, York and Bath.
National Living Wage
The Living Wage, which starts at £7.20 next April and increases to £9 an hour by 2020, will be compulsory and replaces the minimum wage which is now £6.50.
"Today's introduction of the National Living Wage by 2020 is certainly great news for individuals using skill sharing platforms to find flexible work," said Wosskow. "At SEUK we will be looking closely at how this impacts both consumers and workers using sharing economy services."