The Western Mail has reported on Simon’s preventative measure to support startups and save the UK’s vital tech start-up sector. Read the full article here >
A support package worth over £350 Billion is available to support companies and their staff but smaller startups who pay little to no rates and are often early pre-revenue are falling through the cracks.
Simon pointed out that the UK’s high potential startups are going to be the first casualties of the business-depleting Coronavirus unless something is done soon to help them. His support suggestions are based on enhanced tax breaks as well as current programmes that are already available and accessible to startups. Such recommendations include bringing forward future research and development tax credits, matching already secured investments, as well as encouraging startup investors by providing up to 100% reliefs.
Four Recommendations to Support Startups:
1. Fast Track R&D Tax Credit Loans
The Government should provide 100% R&D tax credit loans for all startups easily calculated through their last year’s claim. This could be in the form of a loan up to £100,000. These tax credits can later be repaid through a reduction in their 2021 claims.
2. Job Retention Scheme+
Extend the existing Coronavirus Job Retention Scheme package offered to employers to startups as well. But, release the founders from the furlough working restriction so they can continue to develop their companies.
3. Matching Existing Investments
Offer to match-fund any current investment round term sheets up to the value of £500,000. This would be delivered through a loan note structure with no interest repayment for 24 months to incentivise early repayment.
4. Tax Relief for Startup Investors
Both the Seed Enterprise Investment Scheme (SEIS) as well as the Enterprise Investment Scheme (EIS) have been identified as having been vital tools in securing investment for high potential start-ups since they were initially introduced. To incentivise investors, tax relief for SEIS should be raised to 100% and EIS to 60% for 12 months.