Chancellor Phillip Hammond delivered his first – and last – Spring Budget today.
Here’s a roundup of the key points that are most relevant to those involved in the UK technology industry:
- The main rate of Class 4 National Insurance contributions will increase from 9% to 10% in April 2018 and to 11% in April 2019. Hammond said this will be done to reduce the gap in rates paid by the self-employed and employees, as well as to reflect the introduction of the new State Pension.
- The dividend allowance will be decreased from £5,000 to £2,000 from April next year. According to the chancellor, this is to reduce the tax differential between the self-employed and employed, and those working through a company, to raise revenue to invest in public services, and ensure support for investors is more effectively targeted.
- In addition to the £3.6bn transitional relief, which was announced in November 2016, the government will provide £435m of further support for businesses facing significant increases in bills from the English business rates system. This will include:
- support for small businesses losing Small Business Rate Relief to limit increases in bills to the greater of £600 or the real terms transitional relief cap for small businesses each year.
- providing English local authorities with funding to support £300m of discretionary relief, to allow them to help individual hard cases in their local area.
- The UK government will shortly issue a call for evidence on the case for a new VAT collection mechanism for online sales. This would harness tech to allow VAT to be extracted directly by the Exchequer from online transactions at the point of purchase. The government says this is the first step in tackling VAT avoidance by some overseas traders selling goods online to consumers in the UK.
- From 2019-20, the UK government will provide maintenance loans to students embarking on technical education courses at levels 4 to 6 in National Colleges and Institutes of Technology. The government will also seek to support adults to retrain at these institutions.
- The government will work with business groups and public sector organisations to identify how best to increase the number of people returning to work, supported by £5m in new funding.
- As part of its Industrial Strategy Challenge Fund (ISCF), the government announced an initial investment of £270m in 2017-18 to kick-start the development of disruptive technologies that have the potential to transform the UK economy. These include: biotech, robotics and driverless cars.
- Published today, the government’s 5G Strategy sets out steps for the country to become a world leader in the next wave of mobile tech and services. These include:
- A new national 5G Innovation Network to trial and demonstrate 5G applications. The first phase will see the government invest up to £16m in a cutting edge 5G facility to run the trials.
- Starting this year, the government will invest £200m to fund a set of local projects to test ways in which it will accelerate the launch of full-fibre broadband networks.
The full Budget can be found on the government website.