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‘Helpful gestures but lack of rescue’: UK technology responds to the Spring Statement

UK technology leaders and entrepreneurs have called for more “concrete” government support following the Chancellor’s Spring Statement.

Chancellor Rishi Sunak delivered his Spring Statement Wednesday afternoon, outlining its plans to support the UK economy amid rising inflation, the cost of living crisis and slowing growth.

The statement focused on households, and the Chancellor abolished VAT on household installations for green energy products such as solar panels and heat pumps.

The government is cutting fuel duty by 5p a liter until March 2023, and has promised a number of income tax and National Insurance cuts.

Fewer measures focused directly on supporting businesses, and the Chancellor promised more direct action in the Autumn, such as cutting tax rates on business investments.

Sunak expressed a desire to create “conditions for accelerated growth” for UK businesses, pointing out that the UK’s low rate of innovation is creating a productivity gap.

Despite Sunak’s promise to accelerate business growth, many in the UK technology industry called for more substantial support and criticized the Chancellor for delaying measures until the Autumn Budget.

“This is not to say that the UK is a global technology hub. For technology to have a widespread impact, the Chancellor must use it to create effective solutions to the problems facing small and medium – sized enterprises, ”said Paul Christensen, CEO of payments firm B2B Previse. RATN.

Russ Shaw, founder of Tech London Advocates and Global Tech Advocates told RATN It was “positive” to hear that the Chancellor was setting out plans to boost private sector investment but warned that there was a risk of disruption to the growth of the technology industry waiting until the Autumn budget to address on the digital skills crisis.

“We need concrete plans to attract talent – from overseas and from under-represented domestic communities – to fill thousands of technology vacancies in the UK,” said Shaw.

Relief for small businesses

One measure aimed at helping small businesses is the increase in Employment Allowance. It means companies will be able to reclaim £ 5,000 from their annual National Insurance liability in April instead of £ 4,000.

Alex von Schirmeister, UK Managing Director at software company Xero, described it as a “helpful sign” but did not meet the “expected lifespan”.

Paul Wilson, director of Qbunk, said the increase in the National Insurance allowance could help self – employed tech workers “stay afloat” but that the Spring Statement does not help those most difficult during the pandemic.

Technology industry leaders have warned that the lack of strong financial support means that many organizations will eventually bear the brunt of the cost of living crisis.

“While the announcement of the Spring Statement offers some level of support to individuals, businesses are likely to continue to experience difficulties as the cost of living crisis continues,” said Alan Price, CEO of the HRH BrightHR platform. “As well as increasing outlays, employers are having to compete with record high starting salaries, and consider pay review requests coming in thick and fast from employees who are just as desperate for inflated prices. ”

For Neil Murphy, global channel leader at Smart automation firm ABBYY, the rising cost of living highlights the need for businesses to “support employees in the workplace in the face of increasing stress outside the office”.

Murphy added: “Being frugal with employee development is detrimental to their future and the business. Not only will it limit their skills, and ultimately – the credibility and profitability of the company – but it will also hinder the ability of employees to keep up with the weather, creating the perfect storm. ”

R&D tax credits

The Chancellor announced that the government will reform R&D tax credits to make them “efficient and better value for money”.

Currently, UK R&D levels are less than half the OECD average. Sunak said this will be expanded to include data, cloud computing, and pure math – but did not swear by the financial data. He added that the Exchequer will consider “more generous” R&D credit spending in the Autumn Budget.

Eric Landau, co – founder and CTO at Encord startup computer vision training data platform welcomed the move.

“It’s a great tool to drive more research – focused work in the UK for technology – oriented start – ups like ours,” said Landau RATN. “With UK companies being rewarded for investing in innovation, this should only help technology start-ups in the future.”

However, Njy Rios, director of R&D incentives at consultancy firm Ayming UK, said the lack of clarity meant the government was “essentially just kicking the can”.

Rios welcomed the Chancellor’s consultation with space experts but called for “more concrete and faster changes”.

The R&D reforms will prevent businesses from claiming R&D tax credits for research and development work carried out in the UK – except in exceptional circumstances.

This could be a problem for technology firms outsourcing R&D activity to countries such as Poland and Romania to address the UK’s IT skills shortage.

“Many innovative technology and fintech companies in the UK will see their tax bills jump and locked out of claiming R&D tax credits for work done outside the UK,” said Kevin Edwards, tax partner at accounting network UHY Hacker Young.

Energy

Rising energy costs are at the heart of the business for both businesses and households. Dee Coakley, CEO of Boundless employment services platform told RATN that the statement failed to provide real solutions on how businesses can handle the issue.

“If we are to alleviate these pressures, the UK government should consider introducing subsidies that will reduce the rapid rise in energy bills. Such initiatives have been successfully adopted in Ireland – and the UK could borrow some of the good examples, ”said Coakley.

While firms will welcome the 5p per liter cut in fuel duty by firms, Alistair Baxter, head of receivables at fintech company Taulia, does not think it is enough to help the CFOs.

“Make no mistake that this will not resolve all the issues facing the CFOs. The ongoing energy crisis combined with the fact that 8% inflation later this year will force CFOs to think strategically about supply networks and adopt a greener route for the transport of goods, including freight and electric vehicles, ” said Baxter. RATN.

Spring Statement: variation between sectors

The retail, hospitality and leisure sectors, which have suffered unprecedented economic damage during the pandemic, will receive a 50% discount on their business rates bill of up to £ 110,000 from April.

However, there has been no cut in VAT rates, with some criticizing the government for failing to provide specific support to smaller technology firms.

Sam Martin, COO of a virtual restaurant brand Peckwater brandsthat problems in the hospitality sector are “extending far beyond the Covid” and that “the government’s failure to acknowledge VAT rates will only add to concerns within the industry”.

Martin added that staff shortages and rising energy and commodity costs mean that “the sector is unlikely to return to pre-pandemic performance levels for some time to come”.

Smaller technology companies have criticized the previous government for not qualifying for some of the support given to the hospitality sector, such as the three – month relief from business rates.

Kevin Gaskell, technology start-up investor and director of ITS connectivity firm, said: “My companies, like many tech SMEs, have fallen between all available support stools except interest-bearing repayable bounce lending on her.”

Gaskell added: “Technology is a sector that sustains a high proportion of start-ups in the economy and must be valued for its contribution to the UK economy and the development of high-skilled, high-paying jobs,” said Gaskell. part ITS. “At the moment the government does not seem to have recognized this and I am disappointed with the Chancellor’s response.”

An post ‘Helpful gestures but lack of rescue’: UK technology responds to the Spring Statement first seen on RATN | UK Tech News.

‘Helpful gestures but lack of rescue’: UK technology responds to the Spring Statement

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