Measures to help ambitious tech-based companies raise capital, as well as a commitment to enable non-UK citizens with a job offer from a ‘recognised’ UK scale-up to receive fast-track visas, were among commitments to catch the eye of the fintech sector in the UK government’s Budget.
The Chancellor of the Exchequer’s annual set-piece occasion (3 March) was inevitably dominated by measures to help the country recover from the Covid-19 crisis.
Rishi Sunak’s headline-grabbing announcements included an extension of the county’s Coronavirus Job Support Scheme to September; an expansion of the Self Employment Income Support scheme; and a plan to raise corporation tax from 19% to 25% in 2023 for companies with annual profits greater than £250,000 (about $350,000).
Government initiatives of particular interest to tech-based companies include a £375m (about $523m) programme, entitled ‘Future Fund: Breakthrough’, to steer government investment into ‘highly innovative’ businesses that are aiming to raise at least £20m of funding. Life sciences, quantum computing and ‘clean tech’ were cited as fields of particular interest.
Discounted ‘productivity-enhancing’ software for up to 100,000 small- and medium-sized enterprises (SMEs) will be enabled by a new scheme entitled ‘Help to Grow: Digital’. This will run alongside ‘Help to Grow: Management’, which aims to benefit up to 30,000 SMEs over three years.
On immigration, Sunak announced that the UK will introduce, by March next year, an ‘elite, points-based’ visa, including a ‘scale-up’ stream, enabling those with a job offer from a recognised UK scale-up to be fast-tracked. The government also plans to launch a ‘global business mobility’ visa by spring 2022 for overseas businesses to establish a presence or transfer staff to the UK.
Fintech association welcomes visa plan
In its backing for ‘scale-up’ businesses and commitments on visas, the Budget – a 107-page document – is picking up on themes that were prominent in the HM Treasury-commissioned review of the UK’s fintech sector.
The Fintech Strategic Review, whose 108-page report was published last week, called for tech visas to fast-track the immigration process for fintechs, among a series of recommendations to help the sector. About 42% of UK fintech employees are ‘foreign talent’, according to the report.
Charlotte Crosswell, chief executive of fintech association Innovate Finance, welcomed the Budget’s commitments on talent and innovation. “For many years, the fintech sector has been calling for a swift and dynamic visa scheme that supports fast-growing companies to attract the talent they need to scale in the UK, and compete with our peers in other markets,” she said.
Sunak also touched on the UK Listing Review, whose conclusions were also published today. The review, chaired by Lord Hill, looked at how companies raise equity capital on UK public markets, with recommendations including changing free float rules and formalising dual-share structures to encourage more tech companies to list on the London Stock Exchange.
‘The government looks forward to working with the Financial Conduct Authority following its commitment to bring forward consultations on changes to their rules on issues raised by the review, and will discuss proposals with them imminently,’ according to the Budget document.
‘Bonanza’ of tech policies
Further headline-grabbing announcements included plans for at least £15bn of green gilt issuance in the coming financial year, ‘to help finance critical projects to tackle climate change and other environmental challenges, fund important infrastructure investment, and create green jobs’. The government plans to issue its first sovereign green bond – or green gilt – this summer, with a further issuance to follow later in 2021.
Other commitments included £100m for a ‘Taxpayer Protection Taskforce’ of 1,265 HM Revenue & Customs staff to tackle fraudsters who have exploited Covid-19 government support schemes; and the raising of the limit for contactless payments from £45 to £100.
The ‘Future Fund: Breakthrough’ is a successor to the Future Fund, which provided government loans ranging from £125,000 to £5m to UK-based companies, subject to at least equal match-funding from private investors.
Coadec, an association that represents UK tech start-ups, described the Budget as having announced “an absolute bonanza” of policies to support the tech sector. The group said that there was more in the Budget for start-ups than “for many years”.
Although welcoming the ‘Future Fund: Breakthrough’, Coadec’s executive director, Dom Hallas, said in a briefing note: “We’ll wait and see the detail in the coming weeks – it’s great to have more capital available for growth companies but we want to make sure that it’s the right kind of support going into the companies that need it not propping up ones that don’t.”
INTERESTED TO READ MORE ON THE UK’s FINTECH STRATEGIC REVIEW?
Click here for Global Government Fintech’s report on the review
Click here for Global Government Fintech’s report on a virtual panel discussion convened to discuss the review