back to article Chancellor launches £500m business software subsidy in the UK. What's 'approved' software then?

The UK government is promising to subsidise new software investment by small and medium-sized enterprises by up to 50 per cent, or a maximum value of £5,000. The Treasury has not yet said how that list of "approved" software packages will be drawn up, however. As part of the spring Budget’s effort to Help to Grow, under the …

  1. Dan 55 Silver badge
    Devil

    Sounds great

    Just enough for SMEs to buy the software they need do the online VAT return for MTD, now that HMRC has knocked bridging software from spreadsheets on the head and turned it into a closed shop.

    1. rd232

      Re: Sounds great

      "just enough"? things like Xero, QuickFile or Kashflow do MTD and are £20- £30 per month.

      1. Dan 55 Silver badge

        Re: Sounds great

        So how does this work with subscription software, which most stuff is nowadays. Are uk.gov subsidising the first payment or the first year's payment?

      2. Natalie Gritpants Jr Silver badge

        Re: Sounds great

        So about £300 per year for what I used to do for free. All because using copy-paste is bad whereas doinking your data through layers of commercial software is good.

    2. This post has been deleted by its author

    3. Phones Sheridan

      Re: Sounds great

      Spoke to my bridging software, they have no plans on stopping, they pointed me to this mythbusters page on gov.uk, last update in November.

      https://www.gov.uk/government/publications/making-tax-digital/making-tax-digital-mythbusters

      1. Ken Moorhouse Silver badge

        Re: mythbusters page

        Upvoted for the useful link.

        Hmm, I query the assertion at the end of this paragraph:-

        "Under Making Tax Digital (MTD) for VAT, businesses will have to provide more information than they already do"

        "This is not correct: no business will need to provide information to HMRC more regularly than they do now, nor send any additional information."

        I thought that with Phase 2 it was mandatory to set the "journey" of data into stone, the figures behind the customary Box data supplied on a traditional VAT return. To do so involves submitting that journey, surely?

        I have seen Bridging software using spreadsheets which meets Phase 2 requirements very well. However, I suspect there are some implementations that will fail, because of insufficient linkage between Box and Journey.

        1. Phones Sheridan

          Re: mythbusters page

          Yes, for phase 2, cut and paste went out the window, as did manually filling boxes in in, but I did find another link yesterday where HMRC stated that File-Save actions were fine and considered suitable "digital links" when moving data into bridging spreadsheets. Which is what I've been doing all along. I export as an XLS file from Sage 50, and import it into my suppliers web page by clicking "Upload" and locating the file on disk. The format of the XLS spreadsheet is pretty much 9 cells filled in with the VAT values.

          I'll try and dig out that other link I found.

  2. Buzzword

    Productivity-enhancing software

    If the software is genuinely productivity-enhancing, it should pay for itself in no time, and the govt wouldn't need to chip in.

    1. Doctor Syntax Silver badge

      Re: Productivity-enhancing software

      Enhanced productivity may pay more in the long run than the initial investment cost but the initial investment must still be made.

      1. Claverhouse Silver badge

        Re: Productivity-enhancing software

        True. In cases like this I always advise that a donation to the governing party, and becoming personal friends with MPs and Ministers, brings rich rewards later. Investing in one's future.

  3. Scott Broukell

    How about providing some substantial technical / financial help in order to provide meaningful security assistance, combined with rigorous appraisal of current implementation, to SMEs? I mean, with the apparently growing number of attempts to phish / attack all manner of businesses globally, would it not be prudent to make meaningful efforts to bring SMEs up to speed regarding keeping their systems as safe as possible and teaching good security practice? It would seem a relatively small price to pay now in order to try and protect the green shoots of recovery later - just saying.

  4. Ken Moorhouse Silver badge

    Approved software

    Companies have to be registered companies and have between 5 and 249 employees.

    Apparently this does not apply to bespoke software and it has to be the first time of purchase. As Dan 55 comments, does this cover subscriptions?

    I have a customer who paid a few thousand for some off the shelf software some years ago. There is a new version out which he is interested in upgrading to, but this scheme is almost encouraging him to go to a rival product, buy that and ditch the existing one.

    1. Mike 137 Silver badge

      Re: Approved software

      In reality, this is not about providing software - it's about being seen to support small business - but only businesses larger than 4 employees, so no that small (one of my past clients with a turnover in low millions only had three staff). It's probably been arranged primarily to divert attention from the threats of increased business taxes.

  5. Anonymous Coward
    Anonymous Coward

    Does the Chancellor owns shares in Xero, Intuit, etc by any chance?

    Don't really get this myself; historical "subsidy" schemes like the Individual Learning Account can be disastrous in terms of administration. For those that don't remember ILA; it was a good idea; badly executed. A lot of people saw flaws in the administrative processes of ILA and set up a pair of shell companies; one inputting data to "register" claimants, the other, to "sell" something to purported claimants (often, an e-book so you could extract money from the ILA scheme with no physical goods to bother about). The scheme was such that you could effectively print money by typing in names from the phone book.

    Admin concerns aside, most of the budget appears to be relatively sensible; BUT; what is not in the budget is far more damning than what is in there. Keir called them out on this; one of the first times I've thought he delivered a half effective speech. Useless, awful first-past-the-post...

    1. Nifty Silver badge

      Does the chancellor own shares in Xero, Intuit, etc?

      In effect he has an interest, his wife is an heir to the Infosys fortune and there's TCM by TCM Infosys.

      Quite a few sales of these packages will be getting subsidised by the British taxpayer then if TCM turns up on the approved list.

  6. H in The Hague Silver badge

    Government picking winners

    Who is going to choose that "listed software"? Whenever another political party tried to support certain businesses or industries, the Conservatives would claim, not unreasonably, that "government should not try to pick winners".

    1. HildyJ Silver badge
      Facepalm

      Re: Government picking winners

      M$ Office will be tops on any government list. Sigh.

      1. Ken Moorhouse Silver badge

        Re: M$ Office will be tops on any government list. Sigh.

        If the requirement is for software to be a new purchase, rather than an upgrade then that might scupper this.

    2. Warm Braw Silver badge

      Re: Government picking winners

      The last time I looked into a scheme like this, it was providing small businesses with a "web presence".

      In practice, the money was channelled through a limited list of "approved suppliers", simply distorting the competition for the provision of services to the detriment both of the other suppliers and the businesses that were supposedly getting a freebie.

      It's really all about headlines. If you were feeling generous you could call it "raising awareness".

  7. codejunky Silver badge

    Or

    Assuming a desire to return to growth and stop blowing out the budget we could open the economy back up again. That might help fund the healthcare workers and vaccine procurement. And freezing the personal allowance so as to tax the poor again is just not good.

  8. James Anderson Silver badge

    Would do better to abolish corporation tax

    This is effectivly a tax on British owned and operated companies.

    Foreign owned businesses just do not pay it.

    e.g. Starbucks after some public outcry now "volunteers" to pay approx 3.5 million in corporation tax.

    Costa Coffee pays 24 million.

    Costa could actually reduce this by operating some well know fiddles involving Luxembourg but choose not to. These options are not viable for smaller companies.

    So it raises very little money and gives a competitive advantage to giant multi-national companies over locally owned businesses.

    1. Hawkeye Pierce

      Re: Would do better to abolish corporation tax

      > So it raises very little money

      Are you kidding? It raises around 10% of the total receipts to HMRC which is hardly "little money" in anyone's terms. And that will rise with the announcements in the week's Budget.

      It's also completely incorrect to say "Foreign owned businesses just do not pay it". Foreign owned businesses have lots more opportunity to reduce their declared UK profit (and hence the corporation tax they pay) but many foreign owned businesses in the UK pay corporation tax. Also many British business pay zero or next to zero by the same schemes that help the likes of Starbucks - since you quote two coffee shops, try looking for Caffe Nero's tax payments (a British company). You might need a magnifying glass.

  9. Anonymous Coward
    Anonymous Coward

    Must be from a list of "approved" software?

    Brown envelopes stuffed with cash at the ready....

  10. gerdesj Silver badge
    Windows

    It's not easy to find

    Budget:

    https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/966868/BUDGET_2021_-_web.pdf

    "Help to Grow":

    https://helptogrow.campaign.gov.uk/

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