UK must fix core tax and investment barriers to compete in global tech race, comment from MHA

Russell Cooper, a North West partner at UK accountancy and advisory firm MHA, and part of the firm’s Technology sector team, comments on Chancellor Rachel Reeves' Mais lecture delivered on March 17.

While we welcome the announcement by the Chancellor on AI and Quantum computing, as well as the plans to replicate the Silicon Valley base in the Oxford/Cambridge corridor there are some fundamental problems that need to be fixed before the UK can really compete as a tech player in the world stage. And even then, we may always be second to the behemoth that is the United States.

Encouraging investment in AI is helpful but it should not be the only lever that the Government can pull to promote growth.

In the last two decades under successive governments there has been modest progress towards encouraging entrepreneurs and risk taking in the UK but the recent policy decisions as regards the taxation of non doms and high net worth individuals are a backward step. Capital and talent are increasingly mobile and they will be attracted by an environment that appears more welcoming and user friendly.

As a firm MHA have argued for a more progressive UK corporation tax regime. We have clearly seen with our nearest neighbours, Ireland, that a reduction in the rate of tax encourages more investment and raises the overall tax take significantly.

We also need to encourage more potential investors whether privately or via the London Stock Exchange. We currently don't have those deep pockets who are willing to make long term investments.

And whether we do establish a closer trading relationship with the EU which would certainly benefit plenty of our clients, the reality is that the US is the dominant consumer tech market so it's hardly surprising that the largest tech companies are based there.