Experts call for Budget incentives to boost investment

UK chancellor Gordon Brown's March Budget needs to offer real measures to boost business for technology companies, according to the Technology Industry Group at consultancy, PricewaterhouseCoopers.

The group has published a wish list of tax savings and company schemes to offer an incentive for investment in technology.

Recommendations included tax relief for R&D and exemption from capital gains tax for IT investments and company share options.

The eligibility for tax relief on research should be widened to include R&D rather than just its current narrow definition of scientific research, said author Andrew Bell.

Ian Fletcher, chief economic advisor at the British Chambers of Commerce (BCC) stressed that small businesses should not be excluded from potential tax breaks. "There have to be investment incentives," he said. "The BCC stresses the need to make tax regime investment friendly. We would welcome a reduction of capital gains tax from 40 to 20 per cent as well. But the capital gains tax taper should be reduced to zero to encourage investment in small businesses in the UK."

Bell also claimed share arrangement schemes would enable employees of major technology companies to benefit from any success.

Fletcher added share schemes were a better incentive than performance related pay schemes. "It's a good thing for large corporates, so that everyone in the company can share from the prosperity," he said.