Ten things we'd like to see in the Budget – PwC
Gordon Brown, texture like sun...
Ahead of tomorrow's Budget, PricewaterhouseCoopers' (PwC) technology division has published a list of ten things it would like to see included in the Chancellor's speech. The ten points are, PwC says, ways in which Budget 2000 can give the UK IT industry a boost. Here, reproduced in full, is the PwC top 10 things the hi-tech sector would like from the Chancellor tomorrow: 1 Announce phased reductions in the corporate tax rate, from 30 per cent currently to 20 per cent. There are already signs within the technology industry that the UK is losing market share to countries with lower tax rates. The Irish Government, for example, has pledged to reduce the tax rate in phases to 12.5 per cent. 2 Change the rate on Business Assets for Capital Gains Tax purposes so that the new five-year taper to ten per cent applies to all shareholdings where the holder works in the company. 3 Allow investors to offset against their personal taxable income any losses incurred by start up technology companies in which they have invested. Currently this is not possible in the UK, however an equivalent American investor is able to relieve losses in this way under the US sub-chapter "S" legislation. 4 Allow tax relief for the acquisition cost of all forms of intangible or intellectual property. The UK is generally less attractive than a number of other countries in this area, including the USA and Japan which puts UK companies at a disadvantage in competitive acquisitions with bidders for these territories. 5 Widen the eligibility tax relief on research and development (R&D). Currently,100 per cent tax relief is available for "scientific research" but this has a very narrow definition for example it does not include development expenditure. 6 Widen the scope of the recently announced R&D tax credit system to apply to all companies. The new system, announced in the March 1999 Budget, applies only to small & medium sized companies and also excludes certain joint venture and sub-contract based R&D arrangements. 7 Introduce a share arrangement to enable technology companies to reward employees with shares that would be free from tax, provided they are held long-term. 8 Introduce a cap on the new employer's liability for National Insurance contributions (NIC). Companies are being adversely impacted by the cash cost of these uncapped NIC liabilities over which they have no control and for which the profit and loss account charges arise even before the options are exercised by their employees. 9 Give employers the legal right to pass on all or part of these NIC costs on share options to employees: currently Social Security Law restricts this. 10 Broaden the scope of the new Enterprise Management Incentive system. At present only 10 key employees can be offered £100,000 worth of shares tax-free in order to tempt them to join technology start-ups. The various limits in the system need to be expanded for it to make a real difference. ® Have your say on the Budget. Post your thoughts on The Register's forum and toss your orb in public.
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