UK tech and the 2023 Spring Budget
As part of his 2023 Spring Budget, UK Chancellor Jeremy Hunt included funding for quantum R&D and governmental investment in the field.
As economic uncertainty continues, today's 2023 Spring Budget detailed upcoming developments across the UK economy. It is predicted that the country will not enter a recession this year, according to Chancellor Jeremy Hunt.
Chancellor Hunt announced plans to half inflation, grow the economy, and reduce national debt in his first budget announcement.
By the end of the year, Hunt expects inflation to fall by more than half to 2.9%.
The underlying debt is on track to be 92.4 per cent of GDP by 2027-28, down three percentage points since the Autumn.
In addition to childcare, work incentives, pension rules, and business taxes, the economic landscape was discussed. In addition, the UK government hopes to make the country a tech superpower by 2030.
For the UK tech industry, here are the implications of today's Spring Budget for 2023.
Funding for R&D and tax developments
As a result of full expensing, the Chancellor provided an incentive for purchasing new technology. Every pound invested in IT will be deducted from taxable profits in full and immediately over the next three years, as announced in today's Budget. Small businesses can now claim a £1 million Annual Investment Allowance.
The life sciences sector received tax adjustments as well, with companies able to get £27 back for every £100 invested in R&D. New drug treatments could benefit from this, which is increasingly using artificial intelligence to discover new treatments.
Nevertheless, start-ups have been calling for the reversal of the R&D tax rebates for SMEs, warning of a possible "seismic impact" on the national start-up ecosystem, which could cost small companies around £100,000 annually and result in layoffs.
The rise of new tech hubs
The budget also detailed plans to "supercharge" growth across the country as part of the 'levelling up' strategy. Investing in this scheme will provide £80m in support.
Applicants must demonstrate strong growth potential in order to be considered for this initiative. In addition to England, there will also be zones in Scotland, Wales, and Northern Ireland. According to Chancellor Hunt, areas such as the North East, the West Midlands, Manchester and Liverpool are examples.
A quantum plan for artificial intelligence
The AI sandbox will also boost innovation for start-ups. A total of £800m is being dedicated to exascale computing. To find the next Manchester Baby, a research competition scheme has also been introduced, referred to as the Manchester Prize. This competition will award £1m to the winner, and the scheme will run for a decade.
The Government has also announced a new funding scheme for quantum computing research. It aims to distribute innovation resources with quantum technology across the country in a 10-year initiative called The Plan for Quantum, worth £2.5 billion.