How the UK's latest budget will affect tech in 2015

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How the UK's latest budget will affect tech in 2015

The UK's Chancellor George Osborne made his final budget statement before the General Election today, and as expected, there were a few technology-focused announcements designed to keep politicians, business leaders and voters alike happy.

The first is a measure widely referred to as the "Google tax," which Osborne first mentioned in the autumn statement last September. It's aimed at large, multinational companies such as Google and Amazon, which have been criticised for moving profits offshore in order to avoid Britain's tax rates. In response, the UK government will introduce a 25 percent "diverted profits tax," which is 5 percentage points higher than the 20 percent corporation tax scheduled for April 2016. "I can confirm that we will legislate for it next week and bring it into effect at the start of next month," Osborne said in his budget speech earlier.

Self-driving cars

The government is already funding a few driverless car trials across the UK, but now it wants to go even further. Osborne is promising a £100 million investment for the research and development of "Intelligent Mobility," which is an industry label for forward-thinking transportation. The money will be spent specifically on self-driving car technology and related systems that will be needed to implement them safely on public roads.

All of the UK's major mobile networks are now offering 4G connectivity, but there will always be demand for faster speeds and greater network capacity. In response, the government has agreed to spend £600 million on redistributed 700MHz spectrum. The decision to open up the frequency was announced by Ofcom last November, and the fresh funding will be used to improve infrastructure and retune broadcast transmitters. The 700MHz band offers longer wavelengths that are well-suited for 4G data services, and the government intends to auction the spectrum during the next Parliament.

Better broadband

Slow broadband speeds and nonexistent coverage are huge problems in the UK, especially for rural homeowners. The government already has two "superfast" broadband (24 Mbps) targets to contend with -- national coverage of 90 percent by 2016 and 95 percent by 2017 -- and today's commitments will support them. Osborne says the coalition is "looking" at raising the UK's legal service obligation from dial-up speeds to 5 Mbps, and subsidising "superfast-capable" satellite services that could support hard-to-reach areas. The chancellor also said it was the government's ambition to offer "ultrafast" broadband (100 Mbps or higher) to nearly all UK homes, but, unsurprisingly, stopped short of offering any sort of timeframe. It's a nice remark, but without any detail, the promise is pretty meaningless.

Not all of us can afford blazingly fast broadband either, so the government has also committed £7.4 million to introducing WiFi access in public libraries across England.

It's all about the money

If you've ever been self-employed, you'll know how archaic the current system is for submitting annual tax returns. The UK government seems to agree, and has teased a new "digital tax account" service that will make it easier for both individuals and small businesses to manage their taxes online. Described as a "revolutionary simplification," it'll be introduced next year and give HRMC more of your information automatically. So when you do need to submit a tax return, hopefully the process online will be less stressful, whether you're doing it single-handedly or enlisting the help of an accountant.

In a document published alongside the budget, the government also announced plans to apply anti-money-laundering regulation to UK digital currency exchanges. It could affect cryptocurrencies such as bitcoin, and will be used to "support innovation and prevent criminal use." To ensure its thinking is sound, the Treasury is also spending £10 million on a research initiative spearheaded by Digital Catapult and the Alan Turing Institute.

What is the "Internet of Things?" For many of us, it's still not clear, but the UK government is investing in the space anyway. Around £40 million will be pledged for a new research centre and incubator space, as well as a smart cities "demonstrator" tasked with promoting the latest technologies. Sticking with enterprise-focused announcements for a second, the chancellor is also promising a new, open API standard for the UK banking industry. Few details have been disclosed, but the idea is to help "fintech" startups access banking data and create better business and consumer-facing services. So if you're stuck with a terrible banking app, there's a better chance a service like Simple will launch in the UK.

Creative industries

The UK video game industry has given birth to acclaimed titles such as Grand Theft Auto, LittleBigPlanet and Batman: Arkham Asylum, and the government wants to show it's supporting the next wave of indie developers. A new "Video Games Prototype Fund" will offer £4 million for finance and business support, while a further £4 million, as part of the Skills Investment Fund, will support training in games, film, TV and animation.

In addition, filmmakers will be targeted with a new 25 percent tax relief, as well as reduction in the expenditure requirements for "high-end television tax relief." In short, Osborne really wants Game of Thrones to continue filming in Northern Ireland.

That's all folks. Today's budget was one of Osborne's last chances to make a major impact before the next election. Most of the announcements weren't too surprising, however, due to the chancellor's long-term strategy of limiting public spending and tackling national debt. Some of these technology-focused pledges could improve the UK's infrastructure for the better, though, so you can be sure we'll be keeping a close eye as they develop.

[Image credit: Dan Tentler, Flickr (Better broadband)]

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