Today (March 15) Chancellor Jeremy Hunt announced his Spring Budget for 2023, from Investment zones and tax initiatives to AI & Quantum Computing, we’ve got a rundown of the measures and policies that will impact the technology sector.
In his announcement, Hunt praised the growth and regeneration scheme success of Canary Wharf and Liverpool Docks, and so wants his new budget to create this success elsewhere in the UK.
The budget promised to create 12 new investment zones around the UK with 80m of funding allocated for each over five years.
The areas chosen will be centred around university tech hubs in England, Scotland, Wales and Northern Ireland, offering employers lower national insurance contributions, lower business rates, and capital allowances for purchasing new machinery and equipment.
For businesses outside of these investment zones, support and investment will also be provided in the form of 100 % first year capital allowances, allowing them to deduct the full cost of equipment from pre-tax profits.
This plan is intended to soften the impact of the decision to raise corporation tax from 19% to 25% in the new financial year, but the chancellor has claimed that this will only affect 10% of businesses.
The budget also will reform the UK’s R&D tax credit to include cloud computing and data costs from April 2023. This means that all cloud computing costs associated with R&D, including storage, will qualify for relief. Hunt described this policy as a £1.8bn package of support helping 20,000 cutting edge who day by day are turning Britain into a science superpower.
AI & Quantum Computing
Hunt announced enthusiasm for investment in new technologies such as Quantum Computing & AI, putting forward a £2.5 billon investment into this area. This will be a 10-year programme to take over the current £1bn National Quantum Technologies Programme. The money will go towards training schemes for scientists, engineers, and technicians in the next-generation field.
This action comes from recommendations from Sir Patrick Vallance and the independent Future of Compute Review which includes establishing an AI sandbox for innovators to test and try products before they go to market, clarifying intellectual property rules and building an Exascale Supercomputer.
Alongside this Hunt added there will be an annual £1m Manchester Prize (named after the first small-scale experimental machine built in Manchester.) for the most ground-breaking AI research.
There are plans to fund centres for doctoral training, with the government planning to partner with academia and industry to create 1000 new AI PhDs. This will be backed by £117 million of funding to create the PhDs, with further leveraging industry and university funding.
More on the full Spring Budget 2023 here