The government speaks positively about technology at the core of their strategy, referring to a ‘technology-enabled’ approach in their reforms to public service.

This budget included and made a commitment of $2bn in NHS digital technology. The word ‘technology’ appears 34 times on the Autumn budget policy paper – where it is also clear there is more to come, in time.

For investors and founders, changes in capital gains tax are more modest than forecast. Basic rate capital gains tax on profits from selling shares will increase from 10% to 18%, with the higher rate rising from 20% to 24%. These tax rises will hopefully not dissuade entrepreneurship and investment.

Tax paid by private equity managers on profits from successful deals rising from 28% to 32% is less significant than forecast. private equity has become a feature of the UK tech investment landscape, with many high-profile deals.

A note of caution is that high borrowing and higher spending drives higher inflation. RSM UK project inflation of 2.6% over the next year and that interest rates fall slower – between a quarter to half a percent less than they would have otherwise. This could have a dampening impact on the UK tech investment landscape.

An increase in employers NI to 15% on salaries above £5,000 will be a cost for many UK tech companies. Smaller businesses will look to an increase in employment allowance from £5,000 to £10,500 for relief. 88,574 UK tech companies have been incorporated since 1 Jan 2023, the overwhelming majority of which will still be small – but with big ambitions

Many in UK tech will have been looking for further investment. The government’s industrial strategy does outline £975m for Aerospace R&D, £15bn of Tax reliefs for creative industries and £2bn for automotive.

The government has protected over £20bn of R&D spending for science-based R&D. Tech companies aligned to these sectors will undoubtedly benefit but business leaders will be asking for further commitments, not promises.

Professor Dame Angela McLean and Dr Dave Smith will lead a review on barriers to adoption of transformative technologies that enhance innovation and productivity. An Artificial Intelligence Action Opportunities Action Plan is promised ‘shortly’.

For detailed analysis of the October Budget, click here for RSM UK’s 2024 Budget insights.

This post was sponsored by audit, tax and consulting firm RSM UK.

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