Skills, ADSL and IR35 top IT's Budget agenda

Nick Huber

Chancellor Gordon Brown is unlikely to satisfy everyone in IT when he presents his Pre-Budget Report this week, with tax...

Nick Huber

Chancellor Gordon Brown is unlikely to satisfy everyone in IT when he presents his Pre-Budget Report this week, with tax breaks, faster Internet access and the scrapping of the IR35 tax top of the industry's wish list.

Industry groups and users contacted by Computer Weekly said they wanted the Government to do more to close the skills gap and encourage investment in the new economy through targeted tax breaks. However, most agreed with the thrust of government policy so far.

Aside from long-running gripes such as the IR35 tax on contractors, the message was more of the same from previous budgets.

This boils down to more tax breaks for share options, IT investment and training.

Jim Norton, head of e-commerce policy for the Institute of Directors, said, "I commend what Brown has done already with share options. But he needs to attract the British ex-pats from Silicon Valley and from Boston. We are not lacking in skills or money but skilled management, which can turn ideas into money."

This could be achieved through a combination of share options and tax breaks, said Norton.

He also called for the Government to tackle the skills shortage blighting the industry by extending recent measures that allow the recovery of costs for computer literacy courses.

"We need to be looking at the middle level of skills. For example, by getting skilled technicians," said Norton.

But others, particularly IT professionals from the telecoms and contractor sectors, were less happy with the Government's record on the e-economy.

The Government and telecoms regulator Oftel have been accused of letting BT dictate access to its local loops in the unbundling programme - a critical hurdle on the road to high-speed Internet access.

Communications Management Association director general David Harrington called for the Government to speed up the roll-out of broadband Internet access by giving tax breaks to telecoms operators investing in high-speed Web services.

"A tax break to help telecoms firms roll out broadband access would put everything else in the shade," he said.

Elsewhere, IT contractors have renewed calls for the Government to drop the controversial IR35 tax which forces IT contractors operating as limited companies to pay higher national insurance contributions.

In an open letter to the prime minister prior to the Pre-Budget Report, the Professional Contractors Group called for the IR35 "stealth tax" to be repealed.

"Surely the time has now come for the Government to intervene and repeal this unwarranted legislation which fails to understand the way the knowledge-based sector works," said Professional Contractors Group chairman Gareth Williams.

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