After Jeremy Hunt, the Chancellor of the Exchequer, announced that a policy allowing the cost of IT equipment to be written off against tax will be made permanent, private sector IT buyers ‘ budgets will see swell in the long run.
The so-called “full expensing” policy was initially introduced in the Budget in March as a temporary incentive, but Hunt stated in his Autumn Statement that it will now be implemented permanently. It implies that any organization that pays corporation tax may deduct funds spent on IT equipment, plant, or machinery from deductible profits.
A number of other announcements made by Hunt today ( November 22 ) are likely to be beneficial to the UK IT sector.
More businesses will be able to make claims in support of innovation as a result of changes to research and development ( R&, D) tax credits. From April 2024 onward, two existing programs—the R&, D Expenditure Credit, and SME schemes—will be combined. According to the government, an additional 5,000 smaller businesses will be eligible for a higher rate of relief. By 2028–2029, the changes are anticipated to provide an additional$ 280 million in relief annually to aid in the UK’s innovation drive.
The government will award$ 250 million to two productive bidders in the Long-term Investment for Technology and Science  initiative in support of previously announced actions to encourage British pension funds to invest more in tech startups. Over a billion pounds will be invested from pension funds and other sources into UK science and technology companies, according to the HM Treasury, which will produce new investment vehicles that are tailored to pension fund needs.
The Enterprise Investment Scheme and Venture Capital Trusts, two current business support programs, will even be made available through 2035.
Hunt announced an additional £500 million over the following two years to help establish two more compute innovation centers, bringing total investment to more than £1.5 billion, to support the government’s goals of making the UK a global leader in artificial intelligence ( AI ). According to the Treasury’s complete Autumn Statement report,” These investments will enable researchers and SMEs to develop innovative foundation models and maximize the UK’S potential in AI, enabling, for example, the discovery of new drugs.”
The government has identified five “quantum missions” in support of the National Quantum Strategy, which was unveiled in March. These missions are designed to produce a number of distinct results to spur additional UK advancements in this developing technology field.
By 2035, the world’s “most developed quantum network,” or “quantum sensing-enabled solutions,” quantum navigation systems to be deployed on aircraft and smart, connected quantum sensors that can “unlock new situational awareness capabilities” in the transport, telecoms, energy, and defense sectors, as well as by 2030, to enable every NHS Trust to benefit from these missions.
Rashik Parmar, chief executive of BCS, The Chartered Institute for IT, stated that” Building the UK’s personal quantum computing infrastructure is essential to our future on the global stage.” ” Quantum computing needs to be incorporated into every aspect of business and advanced by a large number of more highly qualified graduates and apprentices.”
Hunt even announced funding of £50 million over the following two years to test strategies to increase the number of apprentices in engineering and other important growth sectors in order to advance skills. In addition to the 12 investment zones announced in March, he likewise revealed three more that concentrated on innovative manufacturing in Greater Manchester, the West Midlands, and the East Midland.
According to Hunt, “local partners anticipate that these will contribute to the catalysting of over £3.4 billion in personal investment and 65, 000 new jobs.”
Pro-innovation legislation
In order for industry regulators like communications watchdog Ofcom to “adapt to enable the safe and speedy introduction of useful emerging technologies” more quickly, the government has accepted the recommendations of a review by its chief medical adviser, professor Angela McLean.
To lessen the regulatory burden on businesses and promote investment and innovation, a consultation has been launched to assess strategies for” smarter regulation” by Ofcom and various industry regulators like Ofgem and Ofwat.
Along with the Autumn Statement, the government also released its Future of Payments Review report, which aims to increase the use of electronic payments by building on advancements in open banking and the UK’s dominance in the fintech industry. A National Payments Vision and Strategy is required in the report to develop a “world-leading payments environment.”
A £960 million Green Industries Growth Accelerator fund will support fresh energy innovation and the move to net-zero emissions.
In his speech to the House of Commons, Hunt remarked that” Europe’s most impressive economy has been given to us by the best universities, the cleverest scientists, and the smartest entrepreneurs.”
In the upcoming ten years, this Autumn Statement for Growth will bring in £20 billion in more business investment annually, employ thousands more people, and support our industries that are growing the fastest.
The package of measures relating to the tech sector was “bigger than some expected,” according to Julian David, CEO of trade body TechUK, in response to a statement from the chancellor.
” This statement has a lot of potential to increase tech sector investment.” Low growth forecasts, but, leave no room for error and give you no time to waste. To put these policies into practice and start growth, the government must collaborate quickly with the tech sector, according to David.
