Yesterday the Chancellor announced the Budget 2021, which includes a myriad of policies to aid the growth of the UK’s tech sector out of coronavirus. Lots of the announcements were focussed on supporting tech and start-up businesses to grow and help the UK recover post-COVID. The Chancellor focussed on three main areas to help our community: accessing finance, talent and means for innovation.
However, there is a lot of information, and lots of noise on Twitter, to wade through. So, to help bring clarity to the onslaught of announcements, we’ve summarised the key announcements.
Business Support
Furlough has been extended until September, with no change of terms. After July, businesses will be asked for a 10% contribution, rising to 20% in August and September. Support for the self-employed will also continue until September.
A new recovery loan scheme will be established from April, which will enable businesses to access loans between £25,000 and £10 million. The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes.
We will also see new restart grants scheme to help British businesses reopen when lockdown begins to ease next month. Non-essential retail businesses will receive grants up to £6,000 per premises. Hospitality and leisure, which are more impacted by restrictions and may open later, can each receive grants of up to £18,000.
The holiday for business rates will continue until the end of June and will be cut by two-thirds for the rest of the year.
‘Help to Grow’ scheme
This new £520m program will provide a new package of support for SMEs that focuses on improving productivity and growth. Under this are two schemes:
- Help to Grow: Digital – Up to 100,000 SMEs will be able to access vouchers that provide 50% off productivity-enhancing software.
- Help to Grow: Management – up to 30,000 SMEs will be given access to Mini-MBAs that consist of 50 hours of tuition and one-to-one support from a business mentor.
Access to Finance
Future Fund: Breakthrough
This emerges from the end of the original Future Fund, which closed to new applications in January. Future Fund: Breakthrough will invest up to £375m of government money in fast-growing UK technology companies. Similar to its predecessor, the government will co-invest alongside the private sector, but it will be aimed at more mature companies in specific areas such as life sciences, quantum computing and clean tech.
Listings Reform
The government has announced that it will look to implement the recommendations from Lord Hill’s Review into the UK’s listings regime. This recommends changing the free float rules and formalising dual-share structures to encourage more tech companies to list on the London Stock Exchange. As well as making London more friendly for special purpose acquisition companies.
Talent & Skills
A Flexi-apprentice scheme
The government will introduce a new fund from July to help employers in England set up and expand portable apprenticeships. This will enable people who need to work across multiple projects with different employers to benefit from the high-quality long-term training that an apprenticeship provides. Employers themselves will also benefit from access to a diverse apprenticeship talent pipeline.
New Visa Streams
The Chancellor unveiled a new scale-up visa, which will enable those with a job offer from a recognised UK scale-up to qualify for a fast-track visa. Similarly, the Innovator visa will undergo a revamp to make it easier for entrepreneurs and foreign-born founders to obtain a visa.
Tax
Stock Options
The government has announced that it will now review the EMI scheme to examine whether more companies should be able to access the scheme.
Pension Charge Cap Review
The government has announced that it will consult within the next month on the pension charge cap, in order to crowd in more institutional capital into startups and scaleups. DWP will also come forward with draft regulations to make it easier for schemes to smooth performance fees over a multi-year period.
R&D Tax Credit Expansion
The budget states that the government will consider bringing data and cloud computing costs into the scope of relief alongside a number of other policy options and priorities at the wider R&D review.
Corporation Tax
The chancellor announced that Corporation Tax would increase from 19% to 25% in 2023, but a new Small Profits Rate will mean that only businesses with profits of over £250,000 will be taxed at the 25% rate. The widely touted increase to Capital Gains Tax (CGT) will not take place, and it is frozen until 2026.
Super Deduction for business investments
The government has increased tax relief for companies to spur business investment in the wake of the coronavirus pandemic and drive productivity. Dubbing it the “super deduction,” chancellor Rishi Sunak said that for the next two years when companies invest they will be able to reduce their tax bill by 130% of the cost.
Shona Wright
Shona covers all things editorial at TechSPARK. She publishes news articles, interviews and features about our fantastic tech and digital ecosystem, working with startups and scaleups to spread the word about the cool things they're up to.
She also oversees TechSPARK's social media, sharing the latest updates on everything from investment news to green tech meetups and inspirational stories.
