UK Founders Secure Budget Wins as Exit Tax Threat Recedes
London, November 27, 2024 - british startup founders breathed a collective sigh of relief following todayS Budget announcement, securing key wins including reforms to the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes, and the removal of stamp duty on initial public offerings (IPOs). the measures aim to bolster the UK’s startup pipeline and address concerns that higher taxes and a challenging economic climate where driving firms abroad.
The Budget marks a significant attempt to reverse a recent trend of companies delisting from the London Stock Exchange – 88 firms exited their primary listings or delisted last year, including Deliveroo, Flutter, and Darktrace. While concerns remain about the long-term impact,the changes represent a tangible effort to anchor the UK’s startup ecosystem and encourage growth.
The reforms include increased limits for EIS and VCT investments, and expanded eligibility for the Enterprise Management Incentives (EMI) scheme.Alongside these changes, the Department of Science, Innovation and Technology (DSIT) announced a £130m growth catalyst scheme, targeted semiconductor funding in Wales, and billions allocated through UKRI for mission-aligned Research and Growth (R&D).
However, founders cautioned that investment alone isn’t enough. AI firms like Phasecraft, Pangaea Data and Fountech AI welcomed the funding but stressed the need for “structural certainty.” Fountech founder Nik kairinos emphasized, “sounding supportive and being supportive are not the same.”
The changes come after warnings that “higher taxes, low consumer appetite, and punitive treatment of regulated systems risked pushing firms abroad,” according to sources familiar with the discussions. Despite the positive steps,one analyst,Jason Warner of SBS,noted,”The intent is there. The question now is whether the momentum reaches the people behind the progress.”
