BusinessCompany NewsHopes dashed for IT firms

Hopes dashed for IT firms

Technology companies were left disappointed by Gordon Brown's Budget last week, because it failed to materialise an expected extension of a capital expenditure tax allowance for large companies.

Link: Budget 2003 special

Instead of an allowance for all companies, the chancellor continued an IT allowance available only to smaller companies.

The IT industry has suffered a two-year slump caused by under-investment in technology by larger corporations, and so was disappointed by the announcements.

‘A capital expenditure allowance would have been a boost to the whole technology sector. Companies are currently holding back on investment plans. An allowance could have brought decisions forward,’ said Kirk Locke-Scobie, UK and Ireland FD of technology company Avaya.

The managing director of accountancy software company Exchequer, Eduardo Loigorri, said he believed the allowance for smaller companies would do little to encourage expenditure in the IT industry.

He argued that these companies were less likely to be able to cope with red tape and said they did not have much money to spend. ‘Larger companies are likely to have the budget to make a difference,’ he said.

Far from offering a boost, Loigorri said the chancellor had made the investment climate worse, because his increase in national insurance would take effect this month. He argued this gave people a feeling of increased regulatory control, which usually forced them to cut their investment budgets even further.

Related Articles

BDO replaces Deloitte as Mitie auditor

Audit BDO replaces Deloitte as Mitie auditor

3m Emma Smith, Managing Editor
CVR Global appoints partner in London office

Company News CVR Global appoints partner in London office

7m Alia Shoaib, Reporter
FTSE100 failing to provide adequate ethics information

Company News FTSE100 failing to provide adequate ethics information

7m Alia Shoaib, Reporter
Moore Stephens recruits new private client partner

Accounting Firms Moore Stephens recruits new private client partner

10m Emma Smith, Managing Editor
Magma Group announces merger, partner promotions

Accounting Firms Magma Group announces merger, partner promotions

10m Emma Smith, Managing Editor
BDO on ‘recruitment spree’ with multiple partner appointments

Accounting Firms BDO on ‘recruitment spree’ with multiple partner appointments

10m Emma Smith, Managing Editor
Brand strength leads to fee income growth for RSM

Accounting Firms Brand strength leads to fee income growth for RSM

10m Emma Smith, Managing Editor
Mazars strengthens audit team with partner appointment

Accounting Firms Mazars strengthens audit team with partner appointment

10m Emma Smith, Managing Editor