When the Government claim they are committed to assist, one could be forgiven for a modicum of skepticism. Such is the gulf between the politician and the voter in the UK that disconnection has never been such an issue, a case exhibited by the worrying numbers turning out currently for former Tory to UKIP candidates.
Entrepreneurial Britain
David Cameron and his divided coalition government have always claimed to want to strive to create an entrepreneurial Britain where new business can flourish and succeed. And while cynics were undoubtedly waiting for some kind of inevitable backtracking standard, as exhibited post-Scottish referendum/NHS/benefits/immigration/education/pensions etc…… Surprisingly and rather pleasingly, Cameron and his cronies have actually put together rather an exciting movement where rising entrepreneurs are literally coming home from America to seek the funding their ideas so desperately need, and so richly deserve.
Seed Enterprise Investment Scheme
With the tax relief investing scheme, the Seed Enterprise Investment Scheme (SEIS), which they introduced in 2012, the Tory/Lib Dem amalgamation have created one of the most attractive investment packages available globally. Because of the perks on offer through use of the scheme, start-up businesses have managed to attract high-profile investment where previously every door would be firmly closed and probably boarded up.
This has helped to kick-start the sector, while Silicon Roundabout is hardly comparable to its American counterpart’s whole valley, everybody’s gotta start somewhere.
Incentives
SEIS offers investors up to 45% off the annual income tax bill, as well as CGT relief, reinvestment relief and other incentives to essentially make what was formerly the highest risk factor (investing in start-ups) into a minimal risk strategy. By offsetting these tax breaks against any losses, investors can practically break even if their chosen investment goes the wrong way.
Of course the idea is that the investment will succeed, and any credible investor will no doubt do their own due diligence to ensure that their interest has every possible chance, but by minimising the financial damage done in the case of failure, suddenly the UK becomes a hugely attractive proposition for start-up investment – particularly with the raft of tech companies currently sprouting up across the capital.
Tech City
As well as creating “Tech City” (home to the roundabout) and SEIS, crowdfunding potential has not escaped the attention of those in power, and flexibility on the rules of investment relating to this growing trend has enabled hundreds of start-ups – and new investors – to get started.
Job Not Done Yet
So although we are witnessing growth in certain sectors, it’s perhaps not quite time for Cameron and co to start patting each other on the back quite yet. There is still work to be done. Recent polls showed that 80% of entrepreneurs in their first 18 months of business had never heard of SEIS, and MP’s scored a worrying 74% who had no idea. There has also been criticism about how information is conveyed when required.
Start-ups are fragile beasts and require assistance to ensure they are utilising the system to full effect, and a lack of the right kind of support from Government bodies is currently seen as a slight downside. But with SEIS, the best intentions have been exhibited, and the results are beginning to shine through…..
