In the Chancellor’s fourth budget George Osborne announced a number measures that look set to benefit tech startups
Key announcements for digital entrepreneurs and startup businesses included a £2,000 Employment Allowance per year towards their employer National Insurance Contributions (NICs) bill. This means many businesses will now pay no National Insurance contributions at all from April 2014.
There will also be £1.6 billion of funding to support Industrial strategies in 11 key sectors, including the Information Economy Strategy. This could mean more future policies that will benefit tech.
Key highlights:
- Stamp duty will be abolished on shares for companies listed on growth markets including the Alternative Investment Market (AIM).
- The first £2,000 of share value anyone receives under the new employee shareholder status will be free from income tax and NICs.
- Capital Gains Tax relief on the sale of a controlling interest in a business into an employee ownership structure.
- Introducing Lord Heseltine’s recommendation of a Single Local Growth Fund, devolved to the local level through new Local Growth Deals
- Second phase of the Red Tape Challenge.
- The technology strategy board will design and launch a new £15 million competition to support digital content production.
- Skills Investment Fund will be increased to £8 million each year over the next two years.
My personal take on today’s announcement
Treasury sources promised us an “unabashed budget for business” and the Chancellor didn’t disappoint.
The Government has recognised the contribution that startups and entrepreneurs make to the economy through growth and job creation and has sought to make it easier for them to continue to do so.
Announced in last year’s budget, the Seed Enterprise Investment Scheme, proved to be one of the most generous investment incentives in the world and has encouraged investment in tech startups. Extension of the Capital Gains Tax relief for investors utilising the Seed Enterprise Investment Scheme will ensure that as many startups and their investors as possible are able to feel the benefit.
The Employment Allowance also looks set to make it easier for startups to take on people by ensuring the majority of them have to pay no employer National Insurance Contributions at all from 2014.
There is also great potential for the ‘Growth Voucher’ announcement, which will allow startups access to expertise such as legal and HR that are vital to overcoming barriers in building a successful company.
I now look forward to working with the Department for Business, Innovation and Skills as they develop their Industrial Strategy for the Information Economy to ensure many of the measures announced today are followed up with a good cross-departmental approach to tech policy including on issues such as copyright reform, broadband and digital skills.
Sara Kelly is the Executive Director for Coadec, the coalition for the digital economy.