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Don't worry about the immigrants... The robots are coming

Posted on: 09 Feb, 17

The new year is well and truly underway with political and economic concerns saturating the news. However, Oury and Clark are questioning if we need to keep an eye on a different kind of uprising...

Oury, what a start to the year it’s been – I think I may have to block my news feeds from anything including the word Trump, as he seems to be everywhere... between that and Brexit clogging up the air waves - I can’t even find my cricket scores anymore?!

Clark says...
Oury says...

I know! ...Can’t we go back to talking about Corbyn not being a strong opposition leader or Top Gear being back on a different channel? Come back Jeremy Clarkson – all is forgiven... can you believe it?... Anyway I was reading this 12 point Brexit plan and I’m pretty sure there’ll be hundreds of twists and turns along the way, but one comment that’s stuck in my head is the PM’s comment that migrant workers put “downward pressure on wages for working class people”.

Yes, I saw and that and thought it was slightly confusing because we have a national minimum wage in the UK that gives a legal right that covers almost every worker above compulsory school leaving age. Furthermore, it increases in April every year (unlike my salary!) and is going up to £7.50 per hour in April for workers who are 25 or over.

Clark says...
Oury says...

It’s a sound bite though isn’t it? Sounds more dramatic, even if it can’t be backed up by fact and we are now witnessing first-hand the post-truth political era...

#POTUS ...of course! You know though, I think automation, AI and robots are a much much bigger threat to working class people than migrants... I mean, the consequences for workers caught on the wrong side of technological progression are potentially grave. If those concerned that migrants create inequality in society, I hope they take some time to start to think about the future inequality that will likely result from the rise of the robots.

Clark says...
Oury says...

Wow, I hadn’t really thought about this, but yeah it’s true. Remember Robot B-9 in Lost in Space...

“Danger Will Robinson, danger Will Robinson...”

Clark says...
Oury says...

Yeah, that one ...it just seemed so improbable that we’d live in a world where robots played such a role in our daily lives...or indeed replaced vast swathes of the workforce. Having said that, every day I thank my new washing machine for its kindly service - and that’s a robot, I just don’t consider it one because it doesn’t look like the one in Lost in Space, nor does it have any chance of doing a tax return. In fact my new washing machine connects to Wi-Fi as well can you believe it! Just so I know how it’s doing when I am at work – can you believe my new text buddy is a Samsung washing machine...

Maybe you should give her a name? Or is it a him? Anyhow... I have heard workers whose jobs are most at threat referred to as “digital refugees” and apparently the rate at which advances are being made in AI is even surprising those people working at the cutting edge of robotics and AI. If a task takes 10 seconds or less to think about, apparently it will soon be able to be done with AI. We are therefore not talking about some vision of the future created by Isaac Asimov, but a reality that we all need to start thinking about... NOW

Clark says...
Oury says...

But I think people’s jobs will change... someone has to manage the robots after all? Or, and surely, if the introduction of robots creates massive profits for companies, we will have to work out how to tax these profits in order to provide and support those without work. Indeed, when you think about it, if we think a lot of people are on benefits now, it sounds like there may be many, many more in a few years’ time.

I don’t disagree, but I think that’s almost a transitional position. As AI will continue to evolve and more and more jobs will be displaced, This will impacting society in such a vast way and will have to triggering enormous changes in everything. I mean, should robots pay tax if they are taking away jobs from workers? With corporation tax being driven down around the world, how is the shortfall in tax revenue going to be met?

Clark says...
Oury says...

It’s a really interesting philosophical question, and one I need to ponder for a bit. Irrespective of this, I’m all for working with and supporting companies that are focused on developing scientific and technological advances. - as The UK government is also committed to this, and offering companies trading in the UK a really good tax relief for research and development in areas of science and technology if the aim of their work is to advance the overall knowledge and capability in a field of science or technology where it involving scientific or technological uncertainty. Indeed, at the moment, the government is providing huge incentives to encourage innovation, and is perhaps helping companies to obsolesce their workers. Is this the ultimate anti-left wing policy??

What a terrifying thought Oury.

Clark says...
Oury says...

Sorry – yeah well - at the moment you should not think about that – and just make sure you claim the R&D benefit it if you can. Put simply, if you are an small or medium sized business (defined as turnover less than 100 million Euros, assets less than 86 million Euros or employing less than 500 people) and you are not profitable - you can reduce the worldwide(yes worldwide) cost of your R&D workforce by 33%, through the cash back incentives. No IP needs to be owned in the UK, and no work actually needs to be conducted in the UK. You don’t need to apply to join the scheme, and even better - they pay you the money within 30days of making a claim.

Surely it can’t be that easy Oury?!

Clark says...
Oury says...

Okay well, you know you always need to read the small print, and I would make sure your advisors are experienced and understand, no plug there, but there is a lot of ambulance chasing and poor quality claims going in that will come a cropper in the future. People don’t realise but HMRC can go back and recover this money from businesses in the future... But in all honesty, it is incredibly simple, well supported by HMRC (I mean they have special units for this, that actually answer the phone?), and very generous. And yes you might invent a way to replace your employees with robots, but this a race the whole world is attempting to win.

And there’s a new scheme as well for large companies now as well, isn’t there?

Clark says...
Oury says...

Yep, The new RDEC Scheme (formerly known as the ‘above the line’ scheme (ATL Credit Scheme), for large companies. This one is a little confusing, but basically the tax credits on R&D are so decent, that the big companies wanted to recognise them “above the line”... the “line” being the line between when things are put onto the public accounts, or buried deep in the private tax return. The calculation is confusing enough to need a whiteboard, biscuits, a few cups of coffee to truly explain – but the short version is this: It effectively means that a large company gets a tax saving (or cash back if they can’t find anywhere to use up their tax saving) of up to 8.8% of the eligible R&D expenditure. Spend £1,000,000 – it’s worth £88,000. Okay, not much it would not seem relative to the SME scheme, but enough to hire a couple more robots... sorry... argh... I mean workers.

Even though we’ve been talking about AI and robotics, to qualify for the R&D tax relief a company doesn’t actually just have to undertake “high-tech” or lab based work, it is applicable across a whole range of sectors including software development, cosmetics and the food industry. Essentially the questions are...What was the problem that needed to be solved? Was there not a commercial solution already available in the public domain? Does a competent professional in his field believe that in order to solve the problem an advancement in science or technology would be required?

Clark says...
Oury says...

It’s a really good example of the UK government’s support of innovation in business and the relief it is limited to “qualifying expenditure”, which includes staffing costs related to R&D projects; materials, water, fuel and power used in carrying out R&D; and software used in the development. Sub-contracted research and development costs is also eligible for relief for SME companies and the sub-contractor does not need to be based in the UK.[And I know what you are wanting to ask... what about “Brexit”??? ...Well the absolute truth – Brexit has no effect other than positive ones on this particular aspect of our tax regime.

Goodness that’s news in itself, nothing but upside from Brexit?

Clark says...
Oury says...

Yup - It will likely mean we don’t have to consider “notified” state aid (R&D relief can be kinda blocked if you received any European State aid as it itself is state aid) as we stand to have a bit of a brain drain... as Can you believe these intellectuals out there, some of them, don’t like Brexit..?? and if anything, they are going to put more money into it now and this has as already been announced by There’s-a Machine... sorry, sorry... what’s wrong with me?... I mean Theresa May, as part of her 12 point thingy...

I wonder how long it will be before HMRC will be using robots to process the tax reliefs?

Clark says...
Oury says...

Hah! Yes, who knows... and I’ll come back to you on whether I think robots should pay tax!

Win £1000 by sending in the best answer to our Brexit related question

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Key Points

1) Don’t worry about immigrants, the robots are coming.

2) That is good news when it comes to commuting by car and reading a newspaper at the same time, bad news when it comes to having a job or indeed owning a car.

3) We have a national minimum wage, which goes up regularly and protects you….a bit… ((see point 2))

4) At the moment, the government offers really generous incentives to companies who innovate under the R&D Scheme tax relief scheme, so if you are solving problems, get in touch with someone decent and use it. You can even use it to build your own robot workforce – but, careful you don’t automate your own job, if you want to keep it.

5) As we are currently philosophically at sea on our attitude towards immigrants, we have no hope of deciding what to do with the robots. But hell, it might make us work out we were wrong about the first bit and we quite like immigrants again.

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Oury and Clark are fictional characters created for this blog. They both have their own personality forged through their respective fictitious back stories . They express their views to drive debate and provide insight. At times, they may be a bit controversial, if so, no offence or discomfort is intended , it's simply to drive constructive thought or action.

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