UK Budget: Cloud tax relief, compute study in historic cost of living crisis
- Reference: 1648206192
- News link: https://www.theregister.co.uk/2022/03/25/uk_chancellor_offers_cloud_tax/
- Source link:
Firstly, if an organization qualifies for research and development tax relief, the services which qualify are being expanded to include cloud services and data analytics.
During his Budget speech this week, chancellor Rishi Sunak said: "We'll reform R&D tax credits so that they're effective and better value for money. We'll expand the generosity of the reliefs to include data, cloud computing, and pure maths."
[1]
Under the Tax Administration and Maintenance Command Paper, R&D tax reliefs are set to be reformed to include some cloud and data costs and refocus support on R&D carried out in the UK, the [2]Spring Statement said [PDF].
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"The government has listened to stakeholders and can confirm that from April 2023, all cloud computing costs associated with R&D, including storage, will qualify for relief. This will allow companies to claim for costs related to the storage of vital data, supporting data-heavy research such as genomic sequencing," the statement said.
The statement also promises a government review into the Future of Compute, "building on a range of compute work across government and in particular the Government Office for Science report on Large Scale Computing."
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"In the past decade, compute has grown as a critical general-purpose technology for productivity, prosperity, and innovation, making it essential to review our compute needs over the next decade. Led by an external expert, the review will provide recommendations to form the basis of a long-term plan for the government's approach to compute," the statement said.
Meanwhile, the Treasury continued plans to help businesses with between five and 249 employees invest in software. The Help to Grow (Digital) scheme announced last year promised eligible SMEs a 50 per cent discount on approved software worth up to £5,000.
At its launch, in the Spring Statement 2021, [6]the scheme set out to help up to 100,000 businesses , but the Treasury did not reveal which software vendors would be included.
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According to [8]documents released with the 2021 Budget, the UK has relatively low adoption of digital technologies and software compared to international competitors, while UK SMEs are less likely to use formal management practices than SMEs in peer countries.
[9]IT vendors set to use headline inflation to justify price hike
[10]Fresh concerns about 'indefinite' UK government access to doctors' patient data
[11]Outsourcing firm Serco wins £212m UK Test and Trace deal
[12]UK's largest union to Arm: Freeze job cuts now
Despite claiming to help 100,000 companies with up to £5,000 software discounts each [13]when it was launched [PDF], Help to Grow: digital was expected to spend £50m in 2021/22, £115m in 2022/23 and £130m.
The Treasury has not revealed how vendors were selected for the scheme. So far, [14]the scheme includes Deskpro, Gold-vision, ZymPro, Capsule CRM, Swiftcase, Zymplify, Quickbooks (Intuit), Crunch.Premium, and Sage.
The Treasury has yet to respond to The Register 's request for comment. ®
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[1] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=2&c=2Yj31QH5EE5PgMGTNuKtx-AAAAJc&t=ct%3Dns%26unitnum%3D2%26raptor%3Dcondor%26pos%3Dtop%26test%3D0
[2] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1062708/Spring_Statement_2022_Print.pdf
[3] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=4&c=44Yj31QH5EE5PgMGTNuKtx-AAAAJc&t=ct%3Dns%26unitnum%3D4%26raptor%3Dfalcon%26pos%3Dmid%26test%3D0
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[6] https://www.theregister.com/2021/03/04/chancellor_launches_500m_business_software/
[7] https://pubads.g.doubleclick.net/gampad/jump?co=1&iu=/6978/reg_offprem/front&sz=300x50%7C300x100%7C300x250%7C300x251%7C300x252%7C300x600%7C300x601&tile=3&c=33Yj31QH5EE5PgMGTNuKtx-AAAAJc&t=ct%3Dns%26unitnum%3D3%26raptor%3Deagle%26pos%3Dmid%26test%3D0
[8] https://www.gov.uk/government/publications/budget-2021-documents
[9] https://www.theregister.com/2022/02/18/it_inflation/
[10] https://www.theregister.com/2022/03/23/uk_government_gp_data/
[11] https://www.theregister.com/2022/03/22/serco_win_212m_deal_to/
[12] https://www.theregister.com/2022/03/21/uks_largest_union_to_arm/
[13] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/966869/Budget_2021_Print.pdf
[14] https://www.learn-to-grow-your-business.service.gov.uk/comparison-tool/filter-by/crm,accounting
[15] https://whitepapers.theregister.com/
Re: To those that have already...
Nice theory, but in practice you'd need at least five employees(*) to handle the paperwork the government would need to decide whether or not they were going to give you support (if the scheme hadn't been cut short before that point anyway). The best advice for most very early phase entrepreneurs is avoid as much government bureaucracy as possible. I speak from experience, both personal and of friends.
(*) Yes, I'm probably exaggerating, but not much.
all cloud computing costs associated with R&D, including storage, will qualify for relief
Why only cloud computing? This is a massive bit of tax engineering that disincentivises in-house data processing and storage. Was it due to all the lobbying from the Amazon / MS / Google lot? Sounds like Sunak got buttered up well by the big execs when touring Silicon Valley doing his "I'm really a modern tech bro too" act and it's going to pay off handsomely for those who already rule the roost (as seems to be his general philosophy about money and who deserves it).
And the activity is called "computing" not "compute", and you don't sound all trendy and with-it with that loathsome bit of attempted jargony language mangling.
Re: all cloud computing costs associated with R&D, including storage, will qualify for relief
Because there are already R&D reliefs on direct software licensing and employment. There aren't direct reliefs on capital expenditure under the same scheme, but these qualify under the separate r&d capital allowance scheme.
Re: all cloud computing costs associated with R&D, including storage, will qualify for relief
" And the activity is called "computing" not "compute", and you don't sound all trendy and with-it with that loathsome bit of attempted jargony language mangling. "
To be fair to that dickhead Rishi, he didn't get the term "compute" from Silicon Valley.
He got it from Red Dwarf, where Rimmer asked Queeg "What does compute mean?" when he's given a feck load of stuff to put in to his Commodore 64.
Better budgies
I thought the budget was great. Especially when government announced that henceforth, MP and quangocrat pay will be performance related. Simple, yet bold move to flip pay rises from being RPI+ to -RPI, reflecting that inflation is a cost to all consumers. I think this should focus politicians on reducing cost of living, not rewarding themselves for creating a cost of living crisis.
Alternatively, we get 5p off a litre of gas. Yey. We're rich. Just ignore that supplies of diesel are running out across Europe. Or despite cloudybollocks and compute being hip & trendy, datacentres need cheap, reliable power. Which we don't have, thanks to politicians dumping crap like the Climate Change Act on us.
How/who defines "R&D" ?
Just that really ?
My companies main thrust of R&D is into how to make more money. Does that count ?
To those that have already...
" the Treasury continued plans to help businesses with between five and 249 employees invest in software. The Help to Grow (Digital) scheme announced last year [...] "
This is par for the course. There have been numerous "growth" schemes from government, and all have excluded every business with less than five employees. Consequently, innovative entrepreneurs don't receive any support to get started. What we really need is support for the first steps to help innovators get started towards "five employees". There must be vast numbers of people with really important contributions to make that currently can't get started, and societal progress is retarded as a result..