London’s Silicon Roundabout is the place where most new businesses are starting in Britain, according to figures from industry experts.
The magic ‘EC1V’ postcode, which takes in The Angel, City Road and Old Street, saw 15,620 new start-ups in the last tax year, says accounting firm UHY Hacker Young.
The firm says that outpaces new financial services businesses around Canary Wharf – which numbered 3,180.
The number of fresh starts in the area also surged ahead of the SE1 postcode around Bermondsey, where new firms opened at the fastest rate in the year – a 13% increase to 5,850 seed businesses.
Mayfair, which is the world’s most expensive neighbourhood to rent office space according to UHY Hacker Young, also ranked highly with just over 2,000 new businesses opening their doors.
Technology centre
“Silicon Roundabout is the place where everything seems to happen in London.” Said Colin Jones of UHY Hacker Young.
“But we are seeing a shift as rising rents force new start businesses to save their cash and move to less expensive areas of the capital.
“Most of the businesses around Silicon Roundabout are technology based and it’s fast becoming the place in London where these businesses are focussed.”
The study also showed only three of the top 20 start-up postcode areas were outside London – BN3 (Hove, West Sussex); LS14 (Leeds) and SK9 (Alderley Edge and Wilmslow, Cheshire).
“Our research shows the government faces a challenge on healing the north-south divide for entrepreneurs as the economy is clearly rebalancing in the capital and leaving most of the rest of the country behind,” said Jones.
“These hot spot areas in London show how clusters of entrepreneurs can help and influence each other.”
How SEIS helps
Many of these businesses take advantage of Seed Enterprise Investment Scheme (SEIS) and crowdfunding to finance research and development before trading.
SEIS has provided millions of pounds for around 2,000 new business start-ups, according to HM Revenue & Customs (HMRC), which manages the investment program.
Introduced by Chancellor George Osborne in his Budget 2012, SEIS offers equity investors in qualifying companies significant tax breaks.
They include income tax reductions, capital gains tax exemptions and loss relief that remove much of the risk of putting money into an untried business for investors.
Crowdfunding – where a pool of investors collaborates on a larger project – can also be nested inside SEIS to take advantage of the tax breaks, providing the investment is properly structured.
