Tax
- VAT registration threshold will be maintained at the current level of £85,000 for two years from April 2018.
- Reducing business rates by £2.3 billion over the next 5 years
Access to Finance
The Budget announces an action plan to unlock over £20 billion of patient capital investment to finance growth in innovative firms over 10 years by:
- Doubling the annual allowance for people investing in knowledge-intensive companies through the Enterprise Investment Scheme (EIS) and the annual investment those companies can receive through EIS and the Venture Capital Trust scheme, and introducing a new test to reduce the scope for and redirect low-risk investment.
- The British Business Bank will seed the first wave of investment with up to £500 million, unlocking double its investment in private capital. Up to three waves will be launched, supporting a total of up to £4 billion investment; backing new and emerging fund managers through the British Business Bank’s established Enterprise Capital Fund programme, unlocking at least £1.5 billion of new investment; backing overseas investment in UK venture capital through the Department for International Trade, expected to unlock £1 billion of investment.
- The Pensions Regulator will clarify guidance on investments with long-term investment horizons. With over £2 trillion in UK pension funds, small changes in investment have the potential to transform the supply of capital to innovative firms.
- Changing the qualifying rules in Entrepreneurs’ Relief to remove the disincentive to accept external investment and consulting on the detailed implementation of that change.
- Launching a National Security Strategic Investment Fund to invest in advanced technologies to contribute to the national security mission.
- The British Business Bank will also support developing clusters of business angels outside London through a new commercial investment programme.
- The government will support businesses to get the finance they need by extending the British Business Bank’s Enterprise Finance Guarantee to March 2022 and expanding the programme to support up to £500 million of loans per annum.
Travel
- Both short-haul and long-haul Air Passenger Duty rates will remain frozen for economy passengers will be frozen. The rates for premium economy, business and first class will, however, increase by £16 and for those travelling by private jet by £47.
Economy
- GDP downgraded to 1.4%, 1.3% & 1.5% in subsequent years before rising to 1.6% in 2021-22
- Growth forecast for 2017 downgraded from 2% to 1.5%
- Productivity growth & business investment also revised down
- Annual rate of CPI inflation forecast to fall from peak of 3% towards 2% target later this year
- £3bn set aside for Brexit preparations
- Another 600,000 people forecast to be in work by 2022
Education and skills
- £600 to schools and colleges for every extra pupil who decides to take Maths or Further Maths A levels or Core Maths.
- £27m to expand the successful Teaching for Mastery maths programme into a further 3,000 schools.
- £84m to fund 8,000 computer science teachers by the end of this Parliament.
Tech
- Introduction of further ground-breaking approaches to regulatory frameworks for AI and driverless cars, in order to attract the world’s most innovative companies
- Backing innovators and investing in R&D – the government has already committed to the biggest increase in R&D spending by any government in the last 40 years. The Budget invests a further £2.3 billion in R&D in 2021-22 from the NPIF, and increases the R&D expenditure credit to 12%, demonstrating clear progress towards the government’s ambition to raise the level of investment in R&D in the economy to 2.4% of GDP. This means that, based on current forecasts, total support for R&D will increase by a third by 2021-22.
- The government will create a new Centre for Data Ethics and Innovation to enable and ensure safe, ethical and ground-breaking innovation in AI and data-driven technologies. This world-first advisory body will work with government, regulators and industry to lay the foundations for AI adoption, which estimates suggest could benefit households across the UK by up to £2,300 per year by 2030, and increase GDP by 10%. The government will invest over £75 million to take forward key recommendations of the independent review on AI, including exploratory work to facilitate data access through ‘data trusts’. The government will create new AI fellowships, and initially fund 450 PhD researchers, to secure the UK’s leading position in the global AI market.
- Regulators’ Pioneer Fund – To help unlock the potential of emerging technologies, the government will establish a new £10 million Regulators’ Pioneer Fund. This will help regulators to develop innovative approaches aimed at getting new products and services to market.
- Tech Nation – To secure the UK’s world-leading position in digital innovation, the government will invest £21 million over the next 4 years to expand Tech City UK’s reach – to become ‘Tech Nation’ – and support regional tech companies and start-ups to fulfil their potential. Tech Nation will roll out a dedicated sector programme for leading UK tech specialisms, including AI and FinTech. Regional hubs will be located in: Cambridge, Bristol and Bath, Manchester, Newcastle, Leeds and Sheffield, Reading, Birmingham, Edinburgh and Glasgow, Belfast, and Cardiff.
- The government will provide a further £1 million to extend the UK Games Fund until 2020, aiding access to finance and business support for early stage video game developers.
- Geospatial data – The UK has some of the best geospatial data in the world, and much of it is held by public bodies. The potential economic value of this data is huge. To maximise the growth of the digital economy and consolidate the UK’s position as the best place to start and grow a digital business, the government will establish a new Geospatial Commission to provide strategic oversight to the various public bodies who hold this data. To further boost the digital economy, the government will work with the Ordnance Survey (OS) and the new Commission, by May 2018, to establish how to open up freely the OS MasterMap data to UK-based small businesses in particular, under an Open Government Licence or through an alternative mechanism, while maintaining the OS’s strategic strengths. The Budget provides £40 million a year over the next two years to support this work.
Immigration
- To support its ambitions on innovation and R&D, the government is encouraging the best and the brightest international scientific and research talent to work in the UK. The government will: change immigration rules to enable world-leading scientists and researchers endorsed under the Tier 1 (Exceptional Talent) route to apply for settlement 47 after three years; make it quicker for highly-skilled students to apply to work in the UK after finishing their degrees; and reduce red tape in hiring international researchers and members of established research teams, by relaxing the labour market test and allowing the UK’s research councils and other select organisations to sponsor researchers. This is alongside the expansion of the exceptional talent route, benefiting current and future leaders in the digital technology, science, arts and creative sectors.
