UK Founders Secure Budget Wins as Exit Tax Threat Recedes
London, November 27, 2024 -โฃ british startup founders breathed a collective sigh of relief following todayS Budget announcement, securing key wins including โขreforms to the Enterprise Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes, and the removal of stamp dutyโ on initial public offerings (IPOs).โฃ the measures aim to bolster the UK’s startup pipeline and address concernsโฃ that higher taxes and a challenging economicโข climate where driving firms abroad.
Theโฃ Budget marks a significantโข attempt to reverse a recent trend of companies โdelisting from theโ London Stock Exchange – 88 firms exited their primary listings or delisted last year, including Deliveroo, Flutter, and Darktrace. While concerns โฃremain about the long-term impact,the changes represent a tangible effort to anchor the UK’s startup โecosystem andโ encourage growth.
The reforms include increased limits for EIS and VCT investments, โคand expanded eligibility for the Enterprise Management Incentives (EMI) scheme.Alongside these changes, the Department of Science, Innovation and Technology (DSIT) โannounced a ยฃ130m growth catalyst scheme, targeted semiconductor funding in Wales, โขand billions allocated through UKRI for โคmission-aligned โฃResearch โandโ Growth (R&D).
However, founders cautioned โthat investment alone isn’t enough. AI firms like Phasecraft, Pangaea Data and Fountech AI welcomed the funding butโ stressed the need for “structural certainty.”โ 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 firmsโฃ abroad,” according to sources โขfamiliar with the discussions. Despite the positiveโค steps,one โanalyst,Jason Warner of SBS,noted,”The intent is there.โ The question now is whether the momentum reaches the people behind the progress.”
