The Spring Budget will inevitably focus on the near-term need to support the economy and the focus on a long term sustainable recovery but there will also be a requirement to fix the public balance sheet. There are plenty of significant tax changes that have been mooted including to Capital Gains Tax and to Corporation Tax; however, we believe that a few small tweaks could make a great difference to many of the companies we work with.
“Last time out there was mention of a review of R&D eligible cost categories to include cloud hosting and data storage costs”
In the R&D world, there is already a significant change ahead with the PAYE cap coming into force on 1st April (more details can be found here) for the SME scheme and the increase in Research and Development Expenditure Credit (RDEC) from 12% to 13%. However, last time out there was mention of a review of R&D eligible cost categories to include cloud hosting and data storage costs, but that never came to fruition. For the majority of companies that we work with who are undertaking software development projects, this is a frustration - while software licence costs are eligible, cloud hosting and data storage costs are not which are often essential to R&D projects. Any updates on this would be of huge significance.
For video games, the main focus is the rate of relief - TIGA recently submitted proposals to HM Treasury about increasing the rate from 25% to 32% which would help support significant growth in the UK games industry to ensure that funding and support is maintained post-Brexit.
Finally, it is possible that the Government may relax the qualifying rules and increase the investment limits for existing incentives such as the Enterprise Investment Scheme (EIS), Seed EIS and Venture Capital Trusts.