Budget: Suppliers call for Chancellor's help

The last year has been exceptionally difficult for suppliers in the IT and communications industry. John Higgins, director...

The last year has been exceptionally difficult for suppliers in the IT and communications industry. John Higgins, director general of the Computing Services and Software Association and Joe Edwards, director of retail finance at Computacenter, spell out some simple measures the Chancellor could introduce in his Budget this week.

John Higgins, director general CSSA

The Chancellor needs to recognise the fundamental role our sector plays in stimulating economic growth and introduce measures which reassure and incentivise our member companies.

The CSSA would like to see the following measures appear in the Budget:
  • An extension to the current three-year scheme in which SMEs can write-off IT equipment in one tax year.
  • The net rate for the new volume-based tax credit for Research and Development to be set at 10%. A net rate below this level will not have the desired benefits on R&D in the UK.
  • The government's policy on lifelong-learning needs to be matched with clear spending commitments to ensure that the UK workforce achieves a basic level of IT literacy.

There are other initiatives which the government could introduce to improve the environment for our members through the introduction of additional business tax reform and changes to existing VAT scheme.

However, almost as important as the content of the Budget will be its tone and specifically its ability to invigorate the various sectors of the economy.

Joe Edwards, director of retail finance at Computacenter

The IT industry needs a boost. The Chancellor has got to help get things moving. We are looking for incentives to encourage organisations to buy. These could include:
  • Allowances: At the moment small and medium sized companies get a 100% write down on IT purchases up to £2.5m. If the chancellor raised that threshold it would help.
  • Training: The chancellor currently gives 100% tax credit for technology training. Why not make it 110% and give organisations a positive incentive to train staff?
  • Home working: This is an increasing part of business life but the chancellor treats it as a benefit in kind. He should be giving businesses an incentive to boost home working.
  • Broadband: The government took the 3G licence money. Let's see them give something back by getting broadband moving. There is a huge amount of government talk about broadband and some incentives on offer, but no real strategic drive.

These are four simple suggestions that could make a difference to the IT industry and the country as a whole.

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