Budget 2017: How to make a downbeat forecast sound better. Say 'tech' a lot?
Trebling comp sci teachers, digi tax evaders clampdown
“The world is on the brink of a technological revolution,” UK chancellor Philip Hammond declared in Blighty's Autumn budget today. “We choose the future; we choose to run towards change, not away from it.”
Indeed, lip service to tech featured prominently in the budget – including re-announcing funding for driverless cars (something that critics have already pointed might be a more apt metaphor for the government).
"Our future vehicles will be driverless", but electric cars will come before autonomous vehicles, said the chancellor. The government will establish a £400m charging infrastructure fund, invest an extra £100m in plug-in-car grant, and £40m in charging R&D. Folks charging the motors at work will not be taxed, he said.
In addition, the government will pump £575m in funding into 5G, artificial intelligence and electric car incentive schemes, something he already announced last weekend.
The government also wants to treble the number of computer science teachers to 12,000 - it will throw £84m to upskill 8,000 comp-sci teachers.
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On the topic of tax evasion, Hammond said: “Digitalisation poses challenges for the sustainability of tax.”
From April 2019, income tax will be levied on royalties from UK sales when paid to low tax jurisdiction. Hammond said such a move will raise £200m a year.
“That does not solve the problem but it does send a signal... We want a sustainable long term solution to tax digital businesses,” he said.
The government is publishing a position paper on tax challenge posed by the digital economy looking at how to address the issue of tax evasion, he said.
Hammond also unveiled long-called-for plans to make online platforms such as Amazon and eBay liable for VAT. That move is intended to clamp down on online VAT fraud, which costs tax payer £1.2bn per year. “We will be making all online market places jointly liable… just as would ensure retailers on the high street to do.”
Other tech-related announcements included £20bn of investment and tax relief over 10 years for innovative companies.
That will include creating a £2.5bn investment fund via the British Business Bank, aimed at unlocking £7.5bn of investment, and doubling the annual allowance for people investing in "knowledge-intensive" companies through the Enterprise Investment Scheme (EIS), intended to unlock £7bn in investment.
Hammond also committed over £30m to trial new solutions on the TransPennine route to improve mobile and digital connectivity on trains.
Elsewhere, the budget was less upbeat. Hammond revealed sharp cut in growth forecasts for 2017 from 2 per cent to 1.5 per cent. He also promised to set aside an extra £3bn to prepare for Brexit.
The so-called "rabbit" was the abolition of stamp duty for first-time buyers purchasing homes up to £300,000. ®