Broadcast and media technology is a significant component of the UK economy, with companies in the sector collectively creating £8.82 billion in revenue, much of it from exports, according to Caretta Portal data.
In an international business, global economic trends are as important as UK-specific ones, but as the Chancellor Rachel Reeves delivers her budget on Wednesday, the UK’s media tech suppliers will be looking for every scrap of positive news to support growth in what, for many, has been a tough year.
First up, taxation. With successive governments making commitments not to raise personal taxes, it’s companies that have continually borne the brunt of filling the fiscal black hole. Let’s not forget the previous government’s move to raise corporation tax significantly from 19 per cent to 25 per cent from April 2023.
In return, businesses were allowed to fully expense major capital investments like plant and machinery. But media technology vendors in the UK mostly build software in the cloud, not factories in Slough, and the only capex for many is a handful of laptops. It would be a huge benefit if similar incentives on software and AI development were included in the Budget. Unlikely though based on the pre-Budget briefings so far.
In fact, we’ve seen the opposite trend. The UK has offered a very generous tax credits scheme for investment in research and development, which has benefited many high-technology industries like media technology. But those vendors using the scheme will know that it’s become increasingly difficult to get claims approved this year, and any investment in R&D with subcontractors outside the UK (such as offshore developers) is no longer allowable. It’s almost as if the government doesn’t want to encourage the sort of high-value software and AI development at which our industry excels.
Employment costs are the biggest expense line for most media tech vendors, and the rise in employer National Insurance contributions in last year’s budget from 13.8 per cent to 15 per cent directly inflated labour costs at exactly the time many companies were facing a tough global economy. The Chancellor would do well to remember that our industry, like many technology sectors, is a global one. Vendors will create new jobs in their subsidiaries in other countries when the UK is too expensive.
Successive Budgets have been generous to the country’s creative economy, supporting film, TV and – more recently – the creator economy. As the Chancellor struggles to balance her books this year, we hope she finds space to continue and grow this support. It’s the UK’s historically-strong creative sector that has underpinned out tremendous broadcast and media technology suppliers, and catalysed much of the innovation that’s subsequently been exported worldwide.
Overall, the UK players in our industry want the same thing as every other SME in the country—a Budget to drive growth, to encourage businesses to invest, hire, expand and export. That’s vital to support growth in the economy as a whole. Based on what we’ve heard so far, the leaks and the backtracking, I’m not holding my breath
