UK Budget gives IT shot in arm
Chancellor moves to help hi-tech sector
Budget 2000 Update The Chancellor of the Exchequer, Gordon Brown, has moved to boost the growth of hi-tech start-ups in the UK. Here, in brief, is a run down of some of the Chancellor's announcements to boost the UK online economy. Singling out IT and the Internet as critical areas for the UK, the Chancellor said: "We must master technological change" and "create a Britain of opportunity". On the subject of Ecommerce, he said: "We must catch up with America as soon as possible." Main points so far
- All small and medium sized businesses investing in IT equipment will now be able to write off against tax 100 per cent of the costs.
- Hi-tech start-ups recruiting essential employees can now offer share options of up to £100,000 per head to up to 15 members of staff.
- Employee shareholders will be subject to 10 per cent capital gains tax rate.
- The rules governing work permits for overseas IT staff will be relaxed.
- Capital Gains Tax is to be reduced for small businesses from the existing 40 per cent to 35 per cent this year and down to 10 per cent over the next five years.
- Investments in unquoted companies, held for at least four years, will benefit from 10p rate.
- The Chancellor said the UK economy had grown by two per cent last year and is forecast to be between 2.75 per cent and 3.25 per cent this year. Inflation was at 2.2 per cent and would stay within the target of 2.5 per cent for the next three years. Following his speech, the Chancellor came under fire from William Hague, the leader of the opposition. In the traditional response to the Budget, the Tory party leader said the Chancellor was the instigator of stealth taxes and accused him of double standards. Despite the impressive talk about the Internet and ecommerce, IR35 was driving hi-tech specialists out of the UK, Hague said. He accused the Government of trying to hide IR35, which was not mentioned in the Budget. "It is called IR35 because it only ever appeared as Inland Revenue press release number 35," Hague said. IR35 will feature in the Parliamentary debate that follows the Budget session. And let's not forget... beer goes up by 1p per pint, ciggies up 25p per pack of 20, fuel is up 2p per litre, wine is up 4p per bottle, but no change on spirits. ® Tune in and turn on to Cash Register, for more tales of the Bubble Economy