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Brown's Budget: Share and share alike
All in all, Gordon Brown has emerged unscathed from his family and pensioner-friendly Budget.

By editorial@silicon.com

Published: Thursday 08 March 2001

And on the face of it, the chancellor has gone some way to address the demands of the IT industry. When silicon.com spoke to influential high-tech industry figures before the budget, they highlighted ecommerce tax breaks, the scrapping and simplification of certain taxes and improving national insurance charges on share options as areas of immediate concern.

While beer-swilling employees of internet start-ups might have breathed a sigh of relief that lunch time drinking sessions won't be any heavier on the pocket, the outlook for their share option deals isn't quite so rosy.

Unapproved share option schemes, which are common among internet start-up companies, will still be subject to hefty national insurance charges. However, the government can be credited with increasing the number of employees that are entitled to be part of shareholder schemes.

Gordon has also been thinking about the UK software development industry. With intellectual property accounting for significant portions of the revenue earned by some technology companies, the introduction of tax relief will of course be welcomed.

There are of course critics of the budget, and maybe they are right in part. Ian Lynch, director of strategic advisory services at Butler Research, said today that allowances for companies implementing new technologies "reverse the work of the Lawson budgets in the 1980s that simplified the tax system in terms of capital allowances". It has indeed been a common complaint - especially among SMEs - that they're having to deal with too much red tape these days.

We weren't expecting Gordon to repeal IR35, but he avoided the topic altogether by failing to mention the controversial legislation.

Some industry watchers were hopeful that he would say something about VAT on digital products. It's certainly an unappealing minefield of an issue and one that the Inland Revenue has been working on. Until a resolution is reached, retailers will just have to put in the overtime to calculate their tax figures.

But one thing we shouldn't forget is that the money raised from 3G auctions last year erased billions of worth of national debt.

So overall the Budget was reasonably good news for the high-tech sector. But Gordon, if he does manage to keep his job, could do better next time round - if he's feeling generous, of course.