Budget 2023: Chancellor confirms tax breaks for IT investments

Jeremy Hunt, Chancellor of the Exchequer, announced in his Spring 2023 Budget that money spent on IT equipment, factories, or machines can be deducted from taxable income over the next three years.

He also announced measures to boost the artificial intelligence (AI) industry in the UK, which he says hosts a third of all European AI firms.

He said he accepted “all nine digital recommendations made by Sir Patrick Vallance in [emerging technologies] the review I asked him to do in the Autumn Statement.” These include the AI ​​Sandbox, which helps AI-enabled companies get their products to market faster.

Hunt has announced a £1m annual prize over the next 10 years for the person or team that does the best UK research in artificial intelligence. He called it the “Manchester Prize” after the first stored program computer built at the University of Manchester in 1948.

Along with the budget, the government released a strategy for quantum computing, and the chancellor announced the government’s intention to become “the world’s leading quantum economy by 2033” with £2.5bn in funding.

Paying homage to Michael Heseltine promoting Canary Wharf and Liverpool Docks as revitalization projects, during the Thatcher and big Conservative years, Hunt announced 12 investment zones in the West Midlands, Greater Manchester, northeast of England, South Yorkshire. West Yorkshire, East Midlands, Teesside and Liverpool. There will also be at least one each in Scotland, Wales and Northern Ireland, he said. Each zone will have a university working with local authorities, he said, and they will be able to access £80m in central government support.

Hunt announced his intention to allocate £900 million to implement the recommendations set out in the document. Overview of the future of computing for an exascale supercomputer. V full spring budget report – known to connoisseurs as the “red book” – it was noted that “according to an independent Overview of the future of computing …the most powerful computer in the UK is only 28th in the world.”

The Red Book says of the government’s quantum strategy: “[It] lays out an ambitious new agenda for quantum research and innovation. The government is investing a total of £2.5 billion over 10 years, focusing on four goals: ensuring the UK is home to the world’s cutting edge quantum science and technology; business support through the possibility of financing innovations and providing access to the world’s leading research centers; encouraging the use of quantum technology in the UK; and the establishment of a national and international regulatory framework”.

Gerard Grech, CEO of Tech Nation, welcomed the budget announcements. “Today’s budget is a positive indication of the UK government’s ambition to become a science and technology superpower. We applaud the measures to support the UK tech industry, including the introduction of additional tax support for R&D, as well as the announcement of the AI ​​sandbox and ambitious quantum investments,” he said.

Commenting on the UK’s position between the two economic powerhouses, the US and the EU, Grech said: “We must use innovative regulation that will allow us to become an international center and leader in artificial intelligence, quantum computing and deep technologies.”

“Today’s budget is a positive indication of the UK government’s ambition to become a science and technology superpower. We applaud the measures to support the UK tech industry.”

Gerard Grech, Tech Nation

Chairman of the UK Parliamentary Committee on Science and Technology MP Greg Clarke said: “I welcome the fact that there is a strong focus on science and technology in this budget. Sustainable investment in research and development is key to accelerating economic growth. That is why today I called for an early resolution of the UK’s association with Horizon Europe.

“I am pleased that the government has announced further support for quantum technologies. Tomorrow the Science and Technology Committee will launch an investigation to scrutinize the performance of the government’s quantum plan to date, and will now include the £2.5bn investment announced today and how the UK compares globally in this strategically important area.

“I also welcome the publication of Sir Patrick Vallance’s review of innovative regulation of new technologies. My committee will carefully consider the results of the review, especially as we continue to investigate AI regulation. We look forward to questioning Sir Patrick about his findings and recommendations before he steps down as Chief Scientific Adviser.”

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