Budget 2017 - Our wish list on AI, planning, venture capital changes and more

Budget 2017 - Our wish list on AI, planning, venture capital changes and more

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Author: Kara Shadbolt

From the introduction of low-pollution transport systems to the adoption of artificial intelligence, and changes to who qualifies for venture capital allowances, law firm Shoosmiths has revealed its hopes and expectations for tomorrow's Autumn Budget.

TRANSPORT

Transport and infrastructure corporate partner Martin Fleetwood said: "We need more encouragement, and funding, for towns and cities to undertake feasibility studies for alternative low pollution transport systems for their areas and to be given the tools to fund such schemes. Arguably the results of such work could have a greater overall benefit for the UK population than transport mega-projects such as HS2. Such studies should look beyond simply reducing carbon and nitrogen oxide emissions and consider the reduction of particulates such as tyre rubber (the so-called Oslo Effect).

"A number of cities have advocates of re-introducing tram routes through congested and polluted city centres, but a positive move from the Treasury to support such activities would have the effect of supporting both enhanced transport systems and cleaner and more healthy towns and cities. The latter also helping our hard-pressed health services."

TAX AND VENTURE CAPITAL

Corporate tax partner Tom Wilde said: "We know that further change is coming to the tax-advantaged venture capital industry with HMRC and the Treasury wanting to ensure that the enterprise investment scheme and venture capital trust regimes are targeted at higher risk companies which are innovative and growing. We fully support the targeting of the tax-advantaged venture capital legislation on those companies which do carry a level of risk and away from capital preservation investments. However, we would hope that the full impact of any changes is properly considered to ensure that companies which do fall within the above categories are not unfairly excluded from the regimes in an attempt to exclude what HMRC and HMT see as being those businesses which should not qualify.

"We would also hope that any changes are not brought into effect immediately to give the industry time to adapt to the new requirements in an orderly fashion, and to study any new legislation which will be produced following the budget. We also hope that clear guidance would be given to HMRC as to how to deal with any current advance assurance applications in the period between the Budget and the new rules coming into force, and that lessons are learned from the time of the last big changes to the regime in November 2015."

Private client equity partner Charlotte Dunn said: "Given the tax lock on income tax, NI and VAT, the chancellor does not have much room for manoeuvre on any tax rises. With the increased tax burden on landlords and other tax raising measures that are now coming into force, the chancellor may consider that the tax burden cannot be increased. Notwithstanding that, there are concerns that the reliefs given on business and agricultural property may be reviewed and the surprise decrease in capital gains tax reversed.

"The residence nil rate band for inheritance tax is unnecessarily complicated. If the Government is committed to making the tax system simpler, they would be well advised to scrap it and simply raise the nil rate band for all taxpayers.

"Various other initiatives such as Making Tax Digital and the online system for registering trusts have yet to be successfully implemented and it would be helpful if these could be bedded in before any further changes are made."

PROPERTY

Real estate partner Kathryn Jump said: "There are few things we are expecting to see in the Autumn Statement/budget, these are predominantly focused on boosting the delivery of housing by providing more money to fund housing and infrastructure projects and measures to help young and first time buyers. These will be linked to the possible changes to stamp duty.

"We are also expecting changes to the planning system itself, to further speed up and simplify the planning system to help get homes built. These steps include proposals to scrap the community infrastructure levy - which is the current cumbersome system of taxing the grant of planning permission - and introducing a more simplified system based on fixed tariffs. We are also expecting changes to the process of getting planning permission to reduce the time it takes from submitting an application to starting building work on site. This could include reducing the amount of time developers have to implement planning consents, to prevent the perceived problem of land banking."

Shoosmiths' head of conveyancing David Parton said he expected an announcement to help first time buyers, and pensioners keen to downsize.

"I predict that the Government may offer an incentive on Stamp Duty Land Tax in the form of relief to help first-time buyers get onto the property ladder," he added. "It is also possible relief may be given separately to pensioners to help them take a step down in later life thereby freeing up larger properties for families, acknowledging a shortage of housing stock presently."

IT AND TELECOMMUNICATIONS

Commercial partner Joe Stephenson said: "To secure a stronger future for the UK's thriving tech sector in a post-Brexit world, investment should be made to ensure there are less barriers for hiring global talent, in addition to more funding dedicated to education and graduate jobs within the tech sectors. There has been a pledge that 2,000 visas will be available and issued to talent outside of the UK but clarity over how many of these will be apportioned to tech specialists would be welcomed.

"We also need clarity over the UK's access to European Investment Bank and European Investment Fund. If retaining a stake in these agencies is not a priority in Brexit negotiations, will alternative measures be put in place by the government and would such funding be enough to provide our tech companies with the funding they need to prosper? Elsewhere, we would also like to see further investment in tech generally and in disruptive innovation within the sector such as Fintech and the continued investment in 5G.

"Finally, it should be confirmed how much of the financial budget will be put towards helping public services adopt new technologies, such as artificial intelligence, and how investment is expanded through other parts of the UK, rather than just London."

IP AND CREATIVE INDUSTRIES

Shoosmiths commercial partner Laura Harper said: "We will look to the Chancellor to outline the steps which he intends to take to support the UK's high growth, high productivity businesses. These will certainly include innovative and technology based, intellectual property rich organisations.

"As part of its Industrial Strategy, the Government recently announced its biggest ever investment in research and development. Beginning in 2021/22, it will work with industry to boost spending to 2.4% of GDP by 2027 and this is estimated to have the effect of potentially boosting public and private investment by £80 billion over the next 10 years. We can expect the Chancellor to expand on his plans for this Industrial Strategy including providing further details of the Government's R&D regime. We'll be interested to see how far the Government is prepared to go in increasing R&D spending on the UK's science and technology sectors to bring them in line with some of our main global competitors. We'll also be looking out for any changes to the creative industries tax reliefs, in particular those relating to video games tax credits and animation tax reliefs."