Chancellor Gordon Brown has laid out measures designed to make the UK a more competitive place for technology firms to do business.
On top of its proposals to extend R&D tax credits to all companies, Labour's second administration will seek to bring in early legislation to reform the competition regime, create a capital gains tax (CGT) more favourable to enterprise than that in the US, improve the tax treatment of share options, help small businesses grow and set targets for each of the UK's regional venture capital (VC) funds.
The Queen confirmed the measures in her speech at last week's opening of parliament.
A white paper will be published next month proposing that competition authorities be allowed to investigate complex sectoral markets, providing a strong legal basis to promote competition across the economy. It will give regulators complete independence and new resources, such as criminal penalties for those involved in cartels.
A second white paper in July will seek to modernise insolvency laws. It will remove the Crown's preferential right to recover unpaid taxes ahead of other creditors, and ensure that collective procedures are used instead of administrative receivership, where just one creditor has control.
From April next year, the CGT rates for business assets will be reduced to 20% after one year and 10% after two years or more.
To improve the tax treatment of share options, Labour will launch a consultation on whether it should double the size of qualifying companies for Enterprise Management Incentives to assets of £30m.
In the next Budget, to help small businesses grow, the 10% corporation tax band will be extended to help reduce their tax. Automatic fines for the late payment of VAT for companies with turnover of less than £100000 will be abolished; in future, fines will only be levied after letters seeking payment have been ignored.
The government has agreed to an investment of up to £60m in UK companies by the European Investment Bank's VC arm. The DTI will make £80m available for seed funding and has set investment targets for the regions: £50m for London, £30m each for the North West and the South East, £25m each for the South West & Yorkshire and Humberside, £20m each for the East of England, the West Midlands and the East Midlands, and £15m for the North East.
Other R&D tax news
Industry wants changes to government R&D tax credit scheme