What technology businesses need to know for 2021

At the start of 2020, we all knew technology would continue to play a big part in our lives – but we didn't know just how significant it would be.

From remote-working software making it possible for large parts of the workforce to operate as normal from home, to the role of artificial intelligence in the search for a coronavirus vaccine , digital solutions have formed an essential part of the global pandemic response.

Many of the trends in technology that existed before this year seem to have been accelerated by the pandemic, and those changes are likely to have an impact in 2021 and beyond.

A digital tax system

Far from slowing down the rollout of Making Tax Digital (MTD), the COVID-19 pandemic has highlighted to HMRC just how much it could benefit from a digital tax system.

A lack of accurate data on self-assessment taxpayers made it harder to implement Government-backed financial support schemes and ensure help was going to the people who needed it.

While none of these changes are due to take place next year, businesses should now be preparing to comply with the new system if they haven't already. Ideally, MTD should form just one part of businesses' ongoing digitalisation, making their processes more efficient overall.

Moving more systems to the cloud, for example, should help businesses to automate more tasks and collect more accurate, real-time data.

Tax changes and measures against tech giants

The UK Government's response to COVID-19 has pushed spending and borrowing to record highs, with the deficit now at its highest level since 1944. 

It seems almost inevitable that taxes will need to rise at some point to cover that economic impact, and we could see some changes announced next year.

There have been reports that Chancellor Rishi Sunak is considering raising the rate of corporation tax from 19% to 24% , for example, and there could be reforms to other areas of the tax system, such as capital gains tax, inheritance tax and national insurance.

On the other hand, regulatory measures set to take effect next year could be more focused on large tech businesses than smaller ones, potentially offering an advantage to SMEs.

The Government has announced it will launch a 'digital markets unit' in 2021, which is intended to improve competition by enforcing a code of conduct for online platforms like Google and Facebook.

It says this will “give consumers more choice and control over their data, help small businesses thrive, and ensure news outlets are not forced out by their bigger rivals”.

While the largest tech companies are still likely to dominate the sector, initiatives like this could mean more opportunities for businesses to advertise online and improve their web presence.

A 2% digital services tax also came into force on 1 April 2020, which targeted large, multinational tech businesses that derive value from UK users. 

Personal data after Brexit

Although the UK has included the EU's general data protection regulation (GDPR) in its own law, and will retain it after the end of the Brexit transition period, there may be some changes in the way businesses are required to manage any personal data they receive from the EU.

This all depends on the EU's assessment of the UK's data protection regime, which has yet to be confirmed.

If the UK's regime is not deemed adequate by the EU, you may need to put alternative mechanisms in place, such as 'standard contractual clauses'. You can find more information on the Information Commissioner's Office website.

The introduction of 5G

Although 5G officially arrived in the UK in May 2019, it has yet to be made available on every network, and not all phones support it. As new devices are released and more networks start offering it, we could see greater 5G availability in 2021.

That doesn't just mean faster loading speeds and video streaming – it could also open up new possibilities for the use of mobile software, including online gaming, augmented or virtual reality, and 'Internet of Things' systems. 

Of course, greater connectivity also comes with a greater need for cybersecurity measures, so tech firms should be especially careful of the risks when developing new products.

More remote-working tools and automation

Since the outbreak of the coronavirus pandemic, working from home has become the norm for many businesses, and we can expect that trend to continue in some capacity even beyond the pandemic.

Even if businesses do return to their physical premises, they're likely to continue taking advantage of remote-working technologies in future – whether that's for flexible working, or to save the time and money that would have been spent travelling to client meetings.

While video conferencing has been a major focus during the pandemic, task management and HR systems are also likely to continue developing throughout 2021, as businesses look to adapt their working practices for the long-term.

E-commerce

Finally, it's impossible to ignore the growth of the e-commerce sector that's taken place this year.

With more people shopping online during lockdown, businesses have had to respond by building and improving their online stores.

As the high street has suffered from the economic effects of the pandemic, and consumer behaviour is likely to change in the long term, ecommerce could continue to grow in 2021, with a greater focus on user experience to replicate some of the benefits of in-store shopping.

We can help you to plan for the future of your tech business.