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UK tech needs tax cuts not Cummings’s state aid boost!
By Chris Denning, Tax Partner at MHA MacIntyre Hudson
Following reports the current UK-EU standoff is partly due to the UK’s hopes to create tech champions through state subsidies, Chris Denning, international tax partner at MHA MacIntyre Hudson, says the UK does not need carte blanche to use state aid to support the tech sector, and cuts to corporation tax would do far more good.
Discussions around state aid freedoms are a distraction from the reality of the UK’s current economic predicament, and what the chancellor does in the next budget could have a far more significant impact on the UK’s attractiveness as a place to locate and develop technology.
The UK has an attractive tax and regulatory regime in place to support the technology sector. Various fiscal incentives and a competitive corporation tax rate, from a G7/G20 perspective, all help drive a growing knowledge-based economy. This regime successfully attracts domestic and international investment in the UK technology sector, all while we are still effectively part of the EU in economic terms. An increase in corporation tax has been mooted, but we believe the opposite is required. A cut can only enhance the UK’s ability both to recover from the pandemic and to remain the gateway into Europe post Brexit.
About MHA MacIntyre Hudson: MHA MacIntyre Hudson is a top 15 UK accounting firm, offering a full range of compliance and advisory services to entrepreneurial businesses, groups and multinationals with operations in the UK, and now to offshore investment funds. The firm has 90 Partners and over 700 staff in twelve offices in London, the South East, East Anglia, and the Midlands. MHA MacIntyre Hudson is the UK member of Baker Tilly International, one of the world’s largest leading networks of independently owned and managed accountancy and business advisory firms.