Here’s a roundup of the seven points that are most relevant to UK tech startups.
1. Business rates revaluation will take place in 2021
In today’s Spring statement, Hammond said the next business rates revaluation would be brought forward to 2021 – as opposed to 2022, as initially scheduled. The chancellor had previously said, in last year’s Autumn Budget, that business rates revaluations would take place every three years, as opposed to every five years, following the next revaluation.
2. A fair tax system aligning multinational digital businesses
The value that digital businesses contribute to the economy is not always reflected in the tax that multinational digital businesses pay on their profits. Hammond said digital businesses were able to create value in a unique way, relying on the participation and engagement of their users, but noted this was not always reflected in the way in which multinational businesses such as Google or Amazon paid tax on their profits.
3. £95m digital infrastructure funding
Today’s Spring Budget saw the allocation of the first wave of funding, providing more than £95m for 13 different areas across the UK. The Autumn Budget launched a £190m Challenge Fund in a bid to help roll out full-fibre to local areas – seeking to provide fast, reliable broadband to more homes and businesses.
4. Digital payments and the use of cash
The government has recognised the shift from cash towards digital payments and is now seeking views on what more it can do. As more and more the UK buyer / seller opts to transact digitally, the government is offering to support businesses who take and make payments online; they want to ensure that people are still able to pay with cash when they need to, and prevent businesses from using cash to evade tax and launder money.
5. £80m funding to hire apprentices
Recognising the difficulty small businesses face, through the apprenticeship levy, the chancellor announced that up to £80m funding will be released to support small businesses in hiring apprentices.
6. Extending tax relief to support self-funded skills training
In a bid to support up skilling and retraining, the government is seeking views on extending the current tax relief to support self-employed people and employees when they fund their own training with a view to improving UK workers’ skills and so boosting the country’s productivity. Hammond said the government is also keen to hear opinions on how it can extend the current tax relief available for self-employed people’s training, and the training of employees when they pay for it themselves.
7. Elimination of late payments for startups
More ambitious from the Chancellor this time, and recognising the negative impact that late payments can have on tech startups, the Chancellor also announced a review into how to eliminate late payments. This is a tricky issue to tackle as after all, many won’t want to damage their relationship with key customers – but it’s nevertheless critical for ensuring firms don’t go out of business due to avoidable cashflow issues.
If you have any questions about the Spring Statement please contact us anytime.