Chancellor Backs UK On Digital Tech, Warns US Tech Giants On Tax

There is only one story today for anyone in any industry in any part of the UK -- the budget. Is it me, or does anyone else think it's just a bit cheeky of the Chancellor to sneak a spring budget in this year and then turn what would have been an autumn statement into an actual budget? One year, two budgets and two opportunities to put a few pence on petrol and cigarettes.

Anyway, the speech itself was pretty much what you would expect on the economy. More funds put aside to get us through Brexit and anyone who has read the papers will not be surprised to see the Chancellor agreeing that growth needed to be revised down quite substantially this year from a prediction of 2% to 1.5%, and then from 1.4% to 1.3% in 2018. 

No surprises there, really -- and no real surprise in that there was no major announcement on tax, beyond abolishing stamp duty for first-time buyers on properties under GBP300k. A huge round of applause echoed around the House of Commons on that simple, yet possibly effective, means of helping young people get on the housing ladder.

However, for adland, one of the major announcements was a signal of intent if you're a massive US tech giant dodging UK tax: the Chancellor is coming after you. OK -- it was a bit of a whimper as an opening salvo, but it's a start. The royalties that a giant pays to use its own name in the UK, to ensure that money goes to a tax haven, will be taxed as income for the UK branch of the business from April 2019 onward. The measure will only raise around GBP200m a year, but there is a positioning paper published today to say how the government is looking to tackle the problem. It's a shot across the bows today, and we can only hope that more is to come. 

Elsewhere, there were a couple of things for digital and tech. For starters, there is a vow to treble the number of computer science teachers in UK schools with an offer to pay for people to be retrained. And there's GBP500m to develop 5G and artificial intelligence (AI) technology.

Amid a lot of talk about start-ups and their importance to the economy, there was another vow to put GBP2.5bn of public money in to projects that improve infrastructure and productivity with a direct promise of GBP2.3bn to invested in R&D with a slight tax break through improve tax credit rates. 

The really exciting part for the digital and tech community will come through the Chancellor's commitment to driverless cars, which was manifested through an investment in the electric car technology that will be their precursor. This includes putting GBP400m in to charging infrastructure, GBP100m in to tax breaks to make electric cars cheaper and a promise not to tax employees who charge up their cars at work. There was also GBP40m put in developing the next generation of charging technology. 

Every year we wait for the "rabbit out of the hat" announcement, and that was most certainly the scrapping of stamp duty for first-time home buyers. However, the digital and tech community should be thinking there were lots of little rabbits pulled out of the hat for them. Investment in teaching computing, building 5G networks and rolling out electric car charge points while the next generation of charging technology is developed.

These are all really encouraging announcements for a Chancellor who appears to be genuinely excited (for an accountant) about the UK's role in tech and how government can help it. Even if the attempts to bring the tech giants to heel on tax seems a little puny, it's a start.

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