Chancellor unveils Spring Statement

This Budget was a significant one for the Prime Minister and Chancellor as they look toward the next General Election. The Chancellor’s main economic message was not necessarily that the economy was going very well, but, rather, that previous forecasts were too pessimistic and the UK is recovering from its economic challenges faster than expected. The Chancellor highlighted that inflation is set to fall from 10.7% to 2.9% at the end of the year with the OBR expecting the UK to avoid a recession.

There were several key announcements for Insurtech UK members, including:

  • The announcement of a new scheme for intensive R&D SMEs, allowing eligible companies to claim £27 from HMRC for every £100 of R&D investment.
  • A three-year programme to allow up to £27bn of “full expensing” for capital investment by UK companies.
  • The creation of 12 new investment zones across the UK to create high-potential growth clusters.
  • The launch of an "AI sandbox" to encourage groundbreaking research into artificial intelligence and quantum computing.

Commenting, Insurtech UK's Co-Chairs, John Warburton and Luisa Barile, stated that: "Whilst Insurtech UK remains disappointed in the overall reduction of R&D support by the Government, we welcome the new enhanced 40% tax support to help research & development intensive SMEs. The move does address some of the concerns that we raised from the Autumn Statement, but the scope is limited in terms of the levels of application. We will continue to work with HM Treasury to ensure that relevant members are aware and able to apply for this new support.

We will also look to explore other aspects of the Spring Budget that provide opportunities for the sector, including: full expensing of capital investment, 12 new investment zones, the relevant aspects of the Pro-Innovation Regulation of Technologies Review, and measures around unlocking investment and supporting AI development in the UK."