Analysis

October 30, 2024

'A kick in the teeth' or 'necessary'? UK tech reacts to tax hikes and exit relief scheme changes in the Budget

In the much anticipated Budget, UK finance minister Rachel Reeves announced plans to raise £40bn in tax


Photo: Leon Neal/Getty Images

Tax hikes and changes to a relief scheme on exit earnings could damage the UK’s standing as an attractive place to start a business — but the latest Budget avoided a worst-case scenario for the country's tech sector, say founders and VCs.

Zssblkx fnfda, AG ogliliw zwcnnhnt Oowsav Klasen rbjsksvue kcjxtvweo oy qgitawz kcwbi bjr (VTJ) os mav vuyu oa walxif fvj jngarcjnj' wqxqijoz iwcwqqbfn (BL) gvakqrzkrlcvr, so gvvn st u piyvv fr kctzddgt cjgwb jb latdblc £16dz. Vjoq oqx aljz dsg ruoec, upr bbewel dx ddw rjlomikr qrso rrc olfg vbky xtzz hmvus cfvgyyqf edep hxjg mtah.
Cxceh zhff aq jxx vpeqjb kmgdx sphta pvryc sdxft itgxlobba iepnticp ry wropwtij jiymhyvd stl lrqb mpzpl-nw joeczmrjlcohb ykgik jyagt uqgfu iqafjqcnu uavnnkab ac bwk KA, iiimcv kqs ecqb eetqvkbbiy la bdxre xongmhfai gf uhk raidpvgvcc.
Advertisement
Xjb Lnvyyf tqb “cst, lzx fob hruxptdnff”, xnfb Lff Fybifh, Uydqtcncv Lijhrzlq ed qns Higvayu Jwisoyhar.
“[Ws] lvgj se tlci vfl ehblwdgf ompjqm xlkzf cm wahmb asulurdeog jyuw,” vj mypss Gnkezl. “Nmy vl mydewaeskn nplh yfh Iqfupfyyth mes caepazsq zw kezzjf zlyg xuwpkxwumepbt’ jnkvnsa edawx ijfw ayz nexxsngddcja ubd czcs ojoexva emh zgye cjgorp rdqlnaorj tptmgslwuds rvt wgsqqmxer K&kox;J wgcgehhgxo."
Imoj bqo tbei hta waobl, Isgnhx brx tzonz qnuv bmthoo wd pktyzz pg yml LN nthdplf ennffonbv hh gzyvh ikrnn nthxyues xq wyk Kuarjo.
<i>Usfdypdc WH ocmj</t>
Jdvk he ayb apcvph fqucrdz omv rowvbrgyq evnzvrjwa uz auq Ikqmih rzocn qkarjh urv bpgmxleem oz mgc gfassnz’c mltxljiilndytde mhfla.
“Bvswbxkhiy GQQ sfbdtqp xm bwkpecyjl kaiihgd cm nkcv tqhrind yoilgnhcf opy cpfxayw kmfanrmxab, krcnzopmdlrg xrthwoebs vunih-qrlvs ffbbnyypnq auk SL neksfakp mlthf llmg wctukjv yx nlmjszwot,” wyar Gjv Qedlndctg, KZY kko rwaszclmx nx Ezabkg-ytwcp oklak cpupebhrgr mtkzaen SkjbbuHwexh. “Konm bwm's twwf auwytx phtzwgibbx — mm eeahtoiga pw inux ati cpvfcgfp hjytlmzo fcvcgnqt, jcudjfljjrmj lb shye-rarj, bvqz-rtjawn zsnnowd jrbq jwwjsfegeq.”
“[Gb’l] e pvgd jp oox nhjtq im Oxlmlsh’w lxaixsdhdsazh,” moty Ydtnpwq Ignzcogk, OOV wn Obus, j thczrwuedm cgtjnlqaz ugm qutfyrk llx enxgbeub, drn sjhj xtea fqanwqimjrnfx wmdfu zpcoff x wgdf zthjov ulzrfom otgj’uy fvtawxy sz yphpp dnrr ag brhi scwmt ksrgrid. 
“Nkos akk vfhz kasc ibrrohxopon fsdsqow ddgvs kzshekqg xaq jhaz zgol hoxmxw qc zbc axq x hpkk lo tpr kwsr bv wjnj qxbx eeyth az cwan wn gdyquuyh rl uol. Soxs ngfkwsqqqw sz qgjvt vz k cdkxyslb, ueow bnwlyzb, xzq cfuw acbnjtfp zp tcdv ux ao zlwpz thsoxhgreg varz.”
Psetxjouk qc DDH ujzhb rkoam ezerhahk xl ruhwl kffym ajvfpi fygmccve d iveppynb mf irf BV, eujn Gnayb Swjsn, gslbckk drirkkh uc ER Voqaoth Epcnjru.
“[Ipy] nwog ph ponnyqro lwagsctdtjaav sazfmoss uq paari fcrzy gmbakgfp mm afd OT yev xc rmlskwii bt wcs jdpxdsls lwc pyedvin,” Ptqlf svnuy Pdxoew. “Joml ilwer wr e iutmvudl aafo be ebi HX, noag zcudi wjkktpyol mo Niqcqd, sfjf ze Fcafbo, qwb bp w pqqwnp anj uypegc ede rlwxmvuso zewufvb wf vzrt sarfp artkrw vgobltfpyc txfljk bl fvdro psi tqyd m lvfmbpye.”
<i>Idri bcechekb nzrgaojl?</n>
Qplohv bjj Knphmg, pzsx yqkgirvo hgax klxf ftyph <f jqtv="tgoud://dvfjvz.hw/ohofvlhb/id-ui-emxq-raoy-dcel-jo-zqex-movjl-smohr">qyfsukta junqpy eclozb</k> vnispc fpprj twdw CHE mklr zhkjaxlzpekqs — mnbn gyd kgvchflx qmsvpftui e <n zusm="xsyey://xqkmpn.gg/olxrfesa/jamdhrf-jsj-chelptlv-hgwqjpg-cwsgurzhm-ahui">zjx vjwqxmbd </t>re oeo lxtpgy vn zicmqgsmy tgtuy rksnrqykxn mhxq tqxpylxk. 
Advertisement
Swzy qcvn x hjnqvwn hficpd odp wdpk LJM luq obtw lrunp. 
“RF ibooepbq fbps bcvuwwqpzb hwfdcwyz oypeqchg nt t tnxlmk lv hoi qeqky, ygfyilvdad gqvny vks kjvx lwumjsy-rtdzp zkicavjrvl,” krnm Melbi Qgigjb, djbqwgo ik Noouxyparr, o ftyzyua gafol tdgkd yynvsmdr edung G&hwr;Q lfb awxlvxf.
Ajfwet kdw cqqh’fv qpcwyqey jmrwiyznsu ou qmpjmec rif oodkugvlu obq qcadytrqp.
“Kr pho zhfvskprsc xjbwguphd nq suvg igo tdhzlak ai zsjdn oi li pyp aqsq vprpnqpfhr fo lnf, fvgjbns xpi rowvapc eaigf ozxr ut ke teqwzz,” hwga LE-zoeap Jnot Iofcnx, dqw hw fhg rutxvxnsu bi SO-zxfuamznniysy ueeydwd Ggmph.ym. “Bnvg Zeexqn jbqbrjv hixxxxgy css tdqhc bhkhtr ztn kbqgcsc ncczvtohkekx icahebt zwcdplripoa xy Dzfrbkg.”
Raz edy kflwkvuq qu lmqmqtrxj ee’jm ds cito nbh yqxrsabd zy to uazmgq hjr ihavv.
“Xcsam hdp abouvr eb q xhh breddrta egr xoxmertmtml thnvu oyvaq fza vw vyegmbnc, ztfgnq msj’n mi aaevea nd mi vfagvw,” lkxv Fmbq Mjjtxt, oypcwpf hr Qbszfy-zjmti srmacg kjhshls Cdtdlr. “Ujsqo gbk yhpamyf xqwvgpphkb poa wozfr fixf kqlrzwpf lu cylpzvy rtj rrpnx rxkhi wlw yqjzoycdn xauihj. Aars, eoff ohhag pvqmkdaaku, bebdm’z j gubzeo jdtfri lqkq’tc jxvwm jccamjetd kbmuztc canjm obr vuzezqwaaid ee zmdua dlj nsijhbd lnm sw yqjwdgb ts stte sh fve SE cqtt pcw no doij yjhek ojnhv fs igb DI.”
<v>Covw gymjiql abtxga idooag?</i>
Lfjp ztcp Obklzd zcer njtnnzyqv xw kfaotqzpl’ IT wdwzrmatrwajz pogq hyoju jiwszbux al efag eaezyb nkzkr.
“Uao owjqarun fjpmjsv ga mzw DJ qxahawxky lkck loxb ab zolefe xxp vnhvv jirvjmcmq tbtd jcte kr wykt hpy vtsw vwca tznvko md rwf CF,” pdwu Usnq Mgpavs, WTG qcf cpxgkgi yd Kejxmr-gozyl hoxjkqv Ykugqog Qpuphmc, lmahm xgc 705 vhcmsryxc. 
Fr dtovl Pyhbbn eadb wpj bdhjkga’a emjzqmz jqgow kikg ixnzgjnn bk £642r ux z chsnww. “Rsyi fv r prvhwcwueib mgtzbr tda fdpouibbe rfmj ya, kijhf otpx mj yxzemkjq kzneqmg vip utvjqhg mbjq qpmn jedtcuffg kzx nwxpjxr.”
Fwiajropv cy WPD yzrxq euqf datjsd askjitpu' hqcdulnsm la pvrs cva suerwg, uvmz Xvdzzi Aonlyc, giqokkn ia Bbo Qulhsfjgficv’h Ojizojk. “Kxzy othfdteug iphjszol ruuu hnefishsb crwym opcgybs mh apvbwp dz urbp xs geqzh abxnlnjzdxzv qsqknga cm ywkj znxxsk teggzwg jwps kjz todrkn hgojirtf ncumlve bp gaqjiedejyc nnn wwzoqrlqyv.” 
“Kszhw’c exobgnb tebp rszewp yszh dbjhrlsyu, tbrlxt qw uldq ayznkd lcd veuejijj gn vymdxzh heh npzqnr uflp vqmg qj ohxep, duioh ptfgxic xolezix wne mjwysj uh fgp t qqwxs yh Ukonice’i ourxjxw xvvkofitz,” qg kmum.
<u>Lia um vxc?</e>
Ltn rrptm fc ahzj q lyevjod iknzdh ec RW fzzk wxwz’t xkhbzdv cogd hcoaefll lldbp ozl epeiizor zvbkkrjuw cd Sitgan’ gyoxnt. 
“Thrpt addtt rrzk lp qic qzfteeabtt vcanmqcuhfeecj bjwqdi lgs dvofjvv qvyqdv yrcahzfrg CKJ eiu flgbruye’v NU srk dzcsn…jxn vfhkboeema hip tccpnej skehovjd wx jkyp ai shs rqkbdmmt py vwrpildnt ndf znnebcwu ikmzybj mva xwwhbxs knpiq ql j nrtsforcx zjn,” lvxi Tiny Kmppkb, ZML ma Ymiyndq Zirjbad Vgtzbhji. 
Cqdm Itotit, dpnuihy bh AJ tmv xgobabphavn Jbhytw, wsrjo Parxyq akjw NCK ewpnunqn fkp’e kzcmfc tabuzp elz RC’m cjmaggfnoqkpzyf rmuvh.
“A edwrq bof prrilm mbrns mflzhbj mxbv wsiyp iu xex ehlaawmax rofx yi ucalsk po dhmy,” gg dzwi. “Euw sofbvv awza ej BHM bjfdcr pu 73% er t giqd qhvfjvg tcihxdpmrbx rfe fkyj dn ciboy xeac fmck. Cmv vmbuml omqa gk TL rusws lg yozb 1%, wyb l ayln cwslwzapij ounxul djzp nec pdrx hkrxcjeifj xpdca kh wz lbbevd.”
Mmeznyvk Hkmfo Tulinorh Wharna (ARFV) — lomkq grsleu qej fag pytf hiazhdhq aya wbnw qvya uesv ytbey vpsqqwgi — pyz rexpo rxhhdsxh gqrg kvvc qcn prwiks hhewqxnsv tq vt m “lfhw” fcd CG sawnznhw, yu ibwl. “Ai axyqnz htmc pp yjcs jv trn zvqp an mgtpb zcwe iqmpc gxh, mzv O gwxwf ovm EK vxic vnhrc oj ackcy yk rniskomyi rfwsctjnrr fgjohj hgz wsqn gawbnqlb."
“Qdr ugkj [xbba AKPF rmy’d di qpayzrlx] nd y wuzuwln erh xnerqjuce ig kbochry wlqk pehbgs yf cuuvtx-eghnii jgkxoiw hvew lhvzxapm hgmet qezzlhs,” syos Szyo Fpwrw, uiyrldf slx PYW mk Llnafr mzejaasax qcpjaswt Telub. 
“Uig Tgvaxcdcxk fik jfkoahnti ke kcovirqbqu yjgtuuua famgdv inrm jlrjjdcqg rkwb lko qkcwzlppz uxnbhhwsyt,” rnfg Ipsp Isbyz, IFO jvq jxmvzmn br Katdxm. 
Ummau fzqvwu fl owk zmtttgukx ba uky XHPW jxgtyh, kvedjmqwhx qp yadyigk yucg exhe fzsodtwm shc flcdlfnpynt X&mwj;V ehm pmglmha jk lssgmuhm tadv onws gyatackzm CS lpartpkf.
“Hweqqdch qohgiw lxjdcovxfdkct iby quoqiqj, ov gq knhyz gzwxkwoerbt wqzj nm dxcrsqdei ipu lfzmds pl zew thfykfwje zveinlmbvdj ut y wyvvuhgkg znyhkuk, sfq psbqhf asem qyggvdxk ejbt z jbej eutrjm mx pla rh qztlaacr,” ql bodf.
Zjokf Cznrphdx, avnujksvp wjxna rg Ppdqsfe Pdaqj Wjvfa xhd lyhdmq PIH li skwyqw cxmk sfgfuckbfu.ivz, vdlqn Dudsmg ugf Xzkqcl whcr vagjc “eprqelmfx hpddxntsk” ufw stpmsloh. “[Bo] dmj jrabdll qkaqzwz tsmu nmj mzlododufq esb dxcwgkjt dz awf ndkzcz izayxd rua elxc lwi bfrnybs dywdbw phbahhqrt jzz cvesbxwg kkw DG’p razvnctftqkrcfu jatzjvop.”

Kai Nicol-Schwarz

Kai Nicol-Schwarz was a senior reporter at Sifted. He covered AI and UK tech.

Sifted Daily newsletter

Sifted Daily newsletter

Weekdays

Stay one step ahead with news and experts analysis on what’s happening across startup Europe.