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What the Scottish Budget 2017-18 means for Scotland’s tech sector

In December, Finance Secretary Derek Mackay presented the Scottish budget for 2017-18. To start off the new year, we would like to give you a quick overview of the upcoming changes to taxes, business support programmes and other initiatives that are relevant to the digital technologies industry.

  • Scottish Growth Scheme: The Scottish Government will invest £500m over three years to provide investment guarantees and some loans of up to £5m to new and early-stage, high growth potential companies that want to grow their exports. This scheme is particularly aimed at technology-intensive sectors like ours and businesses in emerging markets, such as FinTech. The government is still working on the details but the scheme has been approved by the Treasury and will be launched in 2017.
  • SME Holding Fund: EU funding will be used to provide microcredits of up to £25,000 for small and medium sized businesses as well as loans of up to £100,000 and equity investment of up to £2m for SMEs. This fund will be worth £40m in total. This could be of interest to everyone who is looking for funding to grow their business in 2017. Details on how to access this funding are available here.
  • Export and internationalisation support: The number of Scottish Development International (SDI) staff in Europe will be doubled and a new Innovation and Investment Hub will be created in Berlin. Like the Scottish Growth Scheme, this could help you to start selling internationally or increase your exports and break into new markets.
  • Digital connectivity: Derek Mackay announced that over £100m will be invested in digital and mobile infrastructure. The vast majority of this sum has already been announced previously and will be used to deliver 100% superfast broadband coverage by 2012 and address 4G coverage gaps. Our infrastructure members will be interested to hear that the Scottish Government will consider matching the business rates relief for fibre infrastructure that was included in the UK Autumn Budget. 
  • Apprenticeship Levy: The Scottish share of the funds generated through the Apprenticeship Levy, £221m in 2017-18, will be used for a variety of skills, training and employment support initiatives. The most relevant for ScotlandIS members will be an increase in the number of Graduate Level and Foundation Apprenticeships, the establishment of a new £10m Flexible Workforce Development Fund and specific skills support for priority sectors like ours. The Flexible Workforce Development Fund will bring together the college sector with industry to better support in-work training. This is something ScotlandIS has lobbied for over the last month to help plug the digital skills gap.
  • Business rates: The business rates poundage will be reduced by 3.7% to 46.6p. Additionally, more businesses will be eligible for a 100% relief of the business rate trough the small business bonus scheme as the rateable value will be raised to £15,000. The threshold for the large business supplement will also be raised, to £51,000, so that less companies need to pay it.  

As the SNP lost its majority with the last elections, the government needs the support of at least one opposition party to get this draft budget adopted. The Scottish Parliament is currently scrutinising the proposed budget and the vote on it will take place in February. We will keep you posted on developments and details on how to take advantage of the funds and initiatives announced.

Please get in touch with our Research and Policy Manager Svea Miesch at if you have any questions or comments on this.

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