Contributors
Womble Bond Dickinson lawyers share their expert insights into today's (28 October) Budget announcement, from international tax implications to the UK's AI capability:
Will Ford, private wealth partner at Womble Bond Dickinson, commenting on the Budget’s implications for internationally connected taxpayers, investors and business owners, said:
"Chancellor John Healey has missed an opportunity by kicking changes to the UK tax treatment of US LLCs down the road until early 2028. US connected taxpayers will rightly be disappointed that this issue hasn't been gripped.
Along with the banks, landlords and savers are in the firing line with a 2% income tax hike from 6 April 2027.
The announcement of a new capital gains tax Founder's Relief also from April 2027 is however welcome, although as ever the devil will be in the detail."
David Varney, partner in Womble Bond Dickinson’s national digital practice, commenting on the Budget’s measures to strengthen the UK’s sovereign AI capability, technology infrastructure and cyber resilience, said:
"A clear theme from the Budget is technology sovereignty. As global services and supply chains are disrupted, the government wants the UK to have the infrastructure, investment and expertise needed to build its own technological capability rather increasing its reliance on overseas infrastructure and supply chains. The foundation is UK data being housed in UK data centres, but building creates tension around energy, planning and the impact on local communities. The new British Data Centre Covenant should provide greater clarity for developers and communities, and also tackle the grid and planning barriers holding projects back. Further Sovereign AI investment also recognises the need to help promising UK AI businesses grow. But greater capability brings greater risk. Investment in the AI Security Institute and AI-enabled cyber defence will be important in ensuring that the drive for AI growth does not come at the expense of security and resilience. Taken together, these measures send a strong signal of the Government’s long-term commitment to AI and reaffirms that investors should be looking to the UK as an attractive place to develop and scale new technologies."
Jon Bower, Partner and Planning and Infrastructure Team Leader at Womble Bond Dickinson, commenting on what the Government’s new Data Centre Covenant could mean for developers and the planning process, said:
"It will provide a stronger framework for decision making, but more detailed work will be required to understand the economic impact of the covenant - it's encouraged for all data centres but mandatory for those which will be classed as strategic data centres, to qualify for additional Government action. As with any Nationally Significant Infrastructure - which is one consenting route that developers could take - the process can't ignore local impacts, and this covenant will specifically identify elements where developers can demonstrate their compliance. It is not yet clear how these covenants and commitments will be secured in planning terms."
John Connor, partner in the financial institutions practice at Womble Bond Dickinson, commenting on what increase in the bank surcharge would mean for the financial industry, said:
“The immediate effect will be that there will be less profit available for Banks to distribute to shareholders – including institutional shareholders such as pension funds – or to retain and reinvest into new technologies.”
“Challenger banks that have big investment plans may now find themselves with less spare capital to deploy than the established banks in the market.”
