MHA voiced concerns after £2.5bn Govt packaged announced to make Britain the fastest adopter of AI in the G7 

The Government’s £2.5bn investment package to drive UK progress in AI and quantum computing must be accompanied by “a more progressive UK corporation tax regime” that attracts global investors, a Midlands financial services firm said today.

MHA spoke out after Chancellor Rachel Reeves pledged to achieve the fastest AI adoption in the G7 and position Britain as a global leader in the emerging technology.

Unveiled alongside Technology Secretary Liz Kendall at the National Quantum Computing Centre in Oxford, the package includes £500m to back the most promising British AI companies and up to £2bn for quantum computing, making the UK the first country to commit to rolling out quantum systems at scale. 

Government estimates suggest quantum computing could boost productivity by 7% over the next two decades and create more than 100,000 jobs. A separate £500m Sovereign AI Fund is set to launch in April, designed to support British AI firms alongside the quantum push. 

Wider reforms needed

However, tax and business advisers MHA have warned that investment incentives alone will not be enough to establish the UK as a serious competitor on the world stage.

Jason Mitchell, head of technology at MHA, based in Birmingham, said: “While we welcome the announcement by the Chancellor today on AI and quantum computing as well as the plans to replicate the Silicon Valley base in the Oxford/Cambridge corridor, there are some fundamental problems that need to be fixed before the UK can really compete as a tech player in the world stage. And even then, we may always be second to the behemoth that is the United States.

Recent non-dom tax decisions ‘a backward step’

“Encouraging investment in AI is helpful, but it should not be the only lever that the Government can pull to promote growth. In the last two decades under successive governments, there has been modest progress towards encouraging entrepreneurs and risk-taking in the UK, but the recent policy decisions regarding the taxation of non-doms and high net worth individuals are a backward step. Capital and talent are increasingly mobile, and they will be attracted by an environment that appears more welcoming and user-friendly.

“As a firm, MHA has argued for a more progressive UK corporation tax regime. We have clearly seen with our nearest neighbours, Ireland, that a reduction in the rate of tax encourages more investment and raises the overall tax take significantly.

UK must make itself attractive to global investors 

“We also need to encourage more potential investors, whether privately or via the London Stock Exchange. We currently don’t have those deep pockets who are willing to make long-term investments.

“And whether we do establish a closer trading relationship with the EU, which would certainly benefit plenty of our clients, the reality is that the US is the dominant consumer tech market, so it’s hardly surprising that the largest tech companies are based there.“​​​​​​​​​​​​​​​​