Overhaul tax system to boost firms’ tech investment, says Sage boss
The boss of British software giant Sage has called for an overhaul of the UK’s tax system to boost firms’ investment in digital growth and tech infrastructure.
Steve Hare, chief executive of the FTSE-100 group, said that the UK’s current tax rules which treat tech expenditure as an operating expense rather than capital investment risk choking off investment and growth in the UK’s digital economy.
“Our tax system should be remodelled so that every pound spent on tech equipment is treated as a capital investment rather than an operating expense,” he wrote in the Mail on Sunday.
“Policy makers should also be consistent in their path; it makes no sense to increase tax incentives for investment in digital tools with one hand while levying an online sales tax with the other.”
A lack of capital investment by firms has been identified by government as one of the reasons for the UK’s sluggish productivity growth compared to other OECD countries, with firms investing just 10 per cent of GDP each year, compared with 14 per cent in competitor countries.
The Chancellor last month called on firms to share their insight into how to sustainably cut and reform business taxes ahead of the Autumn Budget, with the aim of boosting investment from UK businesses into growth.
Hare added that a lack of reform to the tax system risked shutting some businesses and regions of the UK out of the “coming digital boom.”
“Every lever must be pulled to provide 5G and high-speed broadband across the country as a basic utility affordable for everyone,” he added.