Budget 2018

30 Oct 2018 12:32 PM

Chancellor sends mixed signals comments techUK CEO Julian David.

Commenting on the Budget, techUK CEO, Julian David, yesterday said: 

“Today the Chancellor said that the UK was open for business and prepared to embrace the future. In reality, he has sent mixed signals. Announcements to support the building of new business facilities, support for the acquisition of IP rich businesses and £1.6 billion for Industrial Strategy measures, including Quantum Computing, are very positive.  

“However his proposals for a Digital Services Tax cut across the grain of that positive narrative. techUK remains opposed to any tax that seeks to narrowly target businesses simply because they are digital. The kind of tax being proposed will be bad for investment and bad for the UK economy. 

“We welcome the Chancellor’s recognition of the benefits of an international approach but the OECD and the EU Expert Group on tax have said that a national digital services tax is the wrong idea. This is an international tax issue that needs an internationally agreed solution. Work at OECD level is progressing. The UK should show commitment to that process and not encourage others to look to unilateral action. 

“The proposal to introduce a tax in April 2020 risks cutting across the OECD’s timescale which aims to reach consensus by 2020. It would be bizarre if the UK were to implement a new tax just as real and substantive international action is being reached.  

“This approach risks undermining the UK’s reputation as the best place to start a tech business or to invest. The £500 million threshold the Chancellor proposed is low and risks capturing much smaller companies than anticipated. techUK will engage with the Chancellor’s consultation but it is vital that policy is developed based on the reality of how businesses work, not on theoretical models of how they operate.”