**UK’s Global AI Hub Ambitions in Doubt Following Tax Hike Announcement**
British tech bosses and venture capitalists are questioning the UK’s ability to become a global artificial intelligence hub, following the government’s plan to increase taxes on businesses. The move, announced by Finance Minister Rachel Reeves, aims to hike capital gains tax (CGT) rates to 18% from 10% and 24% from 20%.
**Revised Tax Rates**
* The lifetime limit for business asset disposal relief (BADR) has been set at £1 million. * The rate of CGT applied to entrepreneurs using the BADR scheme will increase to 14% in 2025 and to 18% a year later. * National Insurance (NI) contributions have been raised, with Reeves forecasting this move to raise £25 billion per year.
**Tech Executives’ Concerns**
* Paul Taylor, CEO of fintech firm Thought Machine, said that the hike to NI rates would lead to an additional £800,000 in payroll spending for his business, which is already facing cost pressures. * Haakon Overli, co-founder of European venture capital firm Dawn Capital, expressed concerns that the tax increases could hinder the creation of the next Nvidia, a successful AI company born from venture capital investment.
**Industry Reactions**
* Anne Glover, CEO of Amadeus Capital, welcomed the government’s decision to consult with industry stakeholders on plans to up taxes on carried interest. * Steve Hare, CEO of accounting software firm Sage, noted that while the budget would present significant challenges for UK businesses, the clarity provided would allow firms to plan and adapt effectively. * Sean Reddington, founder and CEO of educational technology firm Thrive, emphasized that the increased taxes would result in higher costs for tech entrepreneurs and could impact hiring decisions.
**National Wealth Fund**
* The UK government has committed to mobilizing £70 billion of investment through the recently formed National Wealth Fund, a state-backed investment platform.
The UK’s tech industry continues to navigate the implications of these tax changes, with some calling for government support to offset the increased costs and ensure the sector’s long-term growth.
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