(c) Menzies LLP - menzies.co.ukSignificant announcements are usually reserved for the autumn budget, however with various tax rates frozen until 2027/28 and tax cuts seemingly off the table, it is not clear if Chancellor Jeremy Hunt will have any big announcements in store for the tech sector this November.

The next Silicon Valley?

It may be PM Rishi Sunak’s aim for the UK to become the ‘next Silicon Valley’, but is the government doing enough to make this happen? In October 2023 tech industry leaders called upon the Chancellor to do more in the autumn statement to develop a digital economy and ensure the UK is not underperforming compared to global peers.

Leaders of companies and groups including eBay, TechUK, Zoom, HP and others, have asked for more support for tech companies, asking in particular for a tax incentive for spending on ‘productivity enhancing’ digital services.

With the introduction of full expensing for capital allowances in April 2023, it may be unlikely these calls will be answered in this budget. However, as the Prime Minister announced in March his 10-point plan to make the UK a ‘science and technology superpower by 2030’, at the very least we hope to hear an update on the first projects which were allegedly worth around £500 million in funding.


The government has introduced various changes to the R&D schemes in recent times. Most notably it reduced relief available to companies in an attempt to reduce overall R&D fraud. However, possibly the biggest change is still to come; the government consulted on a potential merged R&D tax relief scheme earlier in 2023 and consequently produced draft legislation.

If the intention is still to introduce a new merged scheme from April 2024, then we would very much expect the Chancellor to announce the details of such a scheme in this budget.

Tech companies could be hit hard, especially the loss-making ones. It is a stealthy and further reduction to the tax credit rate. In addition, HMRC are still proposing a restriction on the use of overseas workers from April 2024.

Tax rates

We do not expect there to be any big news on this front. Previous budgets have already announced that the dividend tax-free allowance will be halved to £500 in 2024/25. Similarly, the CGT annual exempt amount will be halved to £3,000, which will likely mean more individuals will be required to report capital gains.

In particular, those who are ‘hobby’ investors in assets such as crypto may find themselves with CGT to pay where they didn’t before.

We continue to hope that the current benefits of Business Asset Disposal Relief will remain in order to continue incentivising tech SMEs to set up and grow their businesses in the UK.

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