Channel hopeful that chancellor will reinstate tax breaks for SMEs

After the channel was left disappointed over chancellor Gordon Brown’s failure to reinstate tax breaks for SMEs on IT equipment last year (CRN, 21 March), resellers are hoping they will be re-established in Wednesday’s Budget.

Shaune Parsons, managing director of VAR Computer World Wales, said: “If Brown reinstated the accelerated capital allowances for IT equipment for SMEs, it would help a lot of our smaller customers. Even if he put a cap on [the allowances], so that they only applied to small firms with a turnover of less than £3m, that would be useful. A lot of SMEs can afford the technology, but they cannot afford the consultancy, installation and maintenance services needed to go with it.”

The PC Association (PCA) agreed. But added that it would also like to see tax breaks introduced for SMEs that want to buy IT consultancy services.

Mike Williams, public-sector sales manager at reseller Misco, said: “This year schools will have more say on how much of their budget is spent on IT. In the past there was a separate pot for IT. There will still be a recommended amount to spend on IT in this Budget, but schools can choose to spend it on non-IT products if they wish. Schools will also be able to see this year how much money they will have for the next three years to enable them to plan. Therefore, schools might choose to purchase their IT on a three-year leasing route.”

In its Budget submission, the Federation of Small Businesses called for the chancellor to create a clearer and simpler tax system. IT trade body Intellect called for plans to ensure that tax inspectors understand software R&D, which were promised by the chancellor in his pre-Budget report.

Accountancy firm MacIntyre Hudson said the chancellor should introduce a two-year tax holiday for firms that generate new business opportunities.

Victor Dauppe, tax principal at the firm, said: “If the chancellor wishes to stimulate wider business opportunities, he should offer some support for entrepreneurs who have good ideas for new products or services, by providing a tax holiday on corporation taxes.”