APPG for Entrepreneurship Newsletter: June 2026
/With SXSW London in full swing and founders, investors and policymakers preparing to descend on Olympia next week for London Tech Week, it’s a good moment to reflect on how Britain is faring as a place not just to start a company, but also to scale and stay.
On the first of those three, Britain excels. Few countries can match our density of world-class universities, the level of early-stage finance, or the sheer number of people willing to take the plunge. According to the Global Entrepreneurship Monitor, 36% of working-age adults in the UK are either running a new business or intending to start one within the next three years.
On scaling and staying in Britain, the picture grows more complicated. The Treasury’s Call for Evidence on tax support for entrepreneurs notes that many promising British companies start casting around overseas for capital and opportunity the moment they try to grow. Founders made a similar observation at a recent APPG Evidence Session: firms often plateau at a modest size, or sell early, at precisely the moment they ought to be rocketing. The UK ScaleUp Investment Report found that although over £17 billion was invested into innovative British companies, fewer than 600 raised Series A or B funding (around £3.5 billion). In addition, only about 7% of seed-funded startups progressed to securing institutional scaleup capital.
The Government has taken several measures, the most notable of which came at last autumn’s Budget, including the biggest overhaul of the Enterprise Management Incentive (EMI) and Enterprise Investment Scheme (EIS) regimes in over two decades. The gross-assets ceiling for EMI has quadrupled to £120 million — so that companies can roughly double in size and still qualify — and the window to exercise options has been stretched from ten years to fifteen.
Alongside this, the Call for Evidence invited founders and investors to say how the wider tax system — including more difficult questions around Business Asset Disposal Relief — might better support firms at every stage of their journey. It closed in February, and the Government has promised a response in due course. That’s worth watching closely.
In the meantime, there are plenty of bright ideas. UK Private Capital has proposed a Scale-up Reinvestment Relief, to incentivise founders and entrepreneurs to support the ‘flywheel’ effect by reinvesting their capital and expertise into the UK’s startup and scale-up ecosystem. In a similar vein, Tech Nation has floated a ‘Repeat Entrepreneur Relief’, allowing founders to defer capital gains tax on an exit if they reinvest the proceeds into other British startups. Such proposals draw inspiration, in part, from the US QSBS Rollover. In the US, if a founder or investor sells Qualified Small Business Stock (QSBS), Section 1045 lets them defer the entire capital gain — rather than pay tax on it straight away — provided they reinvest the proceeds into a new qualifying startup within 60 days.
The instinct is good; someone who has already built and sold one company is exactly the person you want building — and backing — the next. Of course, there’s work to be done to iron out details around cost and complexity for such a scheme in the UK. But rewarding founders for recycling their capital and hard-won experience back into the ecosystem is a good idea.
At the same time, as the Chartered Institute of Taxation has warned, there’s a danger of leaning too heavily on investor reliefs while overlooking the more mundane grit in the system — the administrative burden, the regulatory friction, the hours founders lose to compliance rather than building. It is a point that chimes with much of what we’re hearing in our APPG Evidence Sessions, and a healthy reminder that tax is only part of the story. Whether a founder chooses to scale here rather than relocate is shaped, too, by broader factors: the supply of talent, the cost of housing, the quality of everyday life, whether a partner can find work and the children a good school.
Adviser Update
Latest news, research and events from our Advisers
With SXSW London in full swing and founders, investors and policymakers preparing to descend on Olympia next week for London Tech Week, it’s a good moment to reflect on how Britain is faring as a place not just to start a company, but also to scale and stay.
On the first of those three, Britain excels. Few countries can match our density of world-class universities, the level of early-stage finance, or the sheer number of people willing to take the plunge. According to the Global Entrepreneurship Monitor, 36% of working-age adults in the UK are either running a new business or intending to start one within the next three years.
On scaling and staying in Britain, the picture grows more complicated. The Treasury’s Call for Evidence on tax support for entrepreneurs notes that many promising British companies start casting around overseas for capital and opportunity the moment they try to grow. Founders made a similar observation at a recent APPG Evidence Session: firms often plateau at a modest size, or sell early, at precisely the moment they ought to be rocketing. The UK ScaleUp Investment Report found that although over £17 billion was invested into innovative British companies, fewer than 600 raised Series A or B funding (around £3.5 billion). In addition, only about 7% of seed-funded startups progressed to securing institutional scaleup capital.
The Government has taken several measures, the most notable of which came at last autumn’s Budget, including the biggest overhaul of the Enterprise Management Incentive (EMI) and Enterprise Investment Scheme (EIS) regimes in over two decades. The gross-assets ceiling for EMI has quadrupled to £120 million — so that companies can roughly double in size and still qualify — and the window to exercise options has been stretched from ten years to fifteen.
Alongside this, the Call for Evidence invited founders and investors to say how the wider tax system — including more difficult questions around Business Asset Disposal Relief — might better support firms at every stage of their journey. It closed in February, and the Government has promised a response in due course. That’s worth watching closely.
In the meantime, there are plenty of bright ideas. UK Private Capital has proposed a Scale-up Reinvestment Relief, to incentivise founders and entrepreneurs to support the ‘flywheel’ effect by reinvesting their capital and expertise into the UK’s startup and scale-up ecosystem. In a similar vein, Tech Nation has floated a ‘Repeat Entrepreneur Relief’, allowing founders to defer capital gains tax on an exit if they reinvest the proceeds into other British startups. Such proposals draw inspiration, in part, from the US QSBS Rollover. In the US, if a founder or investor sells Qualified Small Business Stock (QSBS), Section 1045 lets them defer the entire capital gain — rather than pay tax on it straight away — provided they reinvest the proceeds into a new qualifying startup within 60 days.
The instinct is good; someone who has already built and sold one company is exactly the person you want building — and backing — the next. Of course, there’s work to be done to iron out details around cost and complexity for such a scheme in the UK. But rewarding founders for recycling their capital and hard-won experience back into the ecosystem is a good idea.
At the same time, as the Chartered Institute of Taxation has warned, there’s a danger of leaning too heavily on investor reliefs while overlooking the more mundane grit in the system — the administrative burden, the regulatory friction, the hours founders lose to compliance rather than building. It is a point that chimes with much of what we’re hearing in our APPG Evidence Sessions, and a healthy reminder that tax is only part of the story. Whether a founder chooses to scale here rather than relocate is shaped, too, by broader factors: the supply of talent, the cost of housing, the quality of everyday life, whether a partner can find work and the children a good school.
In Parliament
Questions and comments relating to entrepreneurship this month
In a debate on defence readiness, Shockat Adam said:
“I will quickly turn to an example that illustrates precisely what backing businesses ought to look like in practice, and where Government procurement could—if the Government choose—make a transformative difference. I have spoken to local textile business owners in Leicester, the city that used to clothe the world. At one stage, it was the second richest city in Europe because of its industry; unfortunately, it is now on its knees because contracts are being given to foreign companies, such as those in China, instead of to young, hard-working British entrepreneurs. Awarding defence uniform contracts to Chinese manufacturers is not simply an economic error, but a strategic one. It creates supply chain dependency on foreign nations at the precise moment when the Government are asking us to take defence seriously. Leicester’s textile sector exists, the capability exists, and the security case for buying British has never been stronger.”
In that same debate, our officer Victoria Collins said:
“The businesses in our communities—the backbone of our economy—are finding it harder, more expensive and more challenging. Darren, who runs Faire at 190 in Berkhamsted, is a serial entrepreneur who knows what he is doing. He is finding the costs and burdens unsustainable. He says that the continuing rise in staff costs is killing the hospitality sector, and goes on to say: “This Government is driving experienced entrepreneurs away, quietly draining the UK of the people most likely to build, hire and invest again.” Our communities feel again and again that they are done to, not worked with.”
In that same debate, Bayo Alaba said:
“All too often, we hear from SMEs in the defence sector that access to funding is limited, slow-moving and difficult to secure. All too often, we see innovative British companies sell up or even relocate overseas. Take Ballistic Dynamics for example, an SME that is passionate about boosting the UK’s defence capability, but whose founders report facing structural barriers such as a lack of consistent funding opportunities and frustratingly opaque tender processes.”
In oral answers to questions on SMEs in defence procurement, the Minister for Defence Readiness and Industry, Luke Pollard, began by saying:
“SMEs are crucial to our success. Through the Defence Office for Small Business Growth, we are cutting red tape and proceeding towards our ambitious SME spend target of an additional £2.5 billion by summer 2028. Last week we announced, with Sweden, the Gripen contract for £500 million of benefits to be shared not just by large companies but by small businesses across the United Kingdom, reinforcing the fact that defence is an engine for growth.”
In a debate on energy security, Danny Kruger said:
“I was going to intervene earlier on the right hon. Member for Oxford East (Anneliese Dodds), who was bewailing the exit of UK tech entrepreneurs in the AI space and saying that we should be more like Europe in that regard. Those entrepreneurs are not leaving the United Kingdom to go to the EU; they are going to the middle east, the United States or the far east, because those countries have a pro-tech industrial policy, and that is what we need in our country.”
Looking Forward
Consultations and calls for evidence from government departments and Select Committees
HM Revenue and Customs — Cryptoasset taxation — stablecoins (Deadline: 7 May 2026)
Ministry of Housing, Communities and Local Government — Fees for planning applications (Deadline: 18 May 2026)
Department for Business and Trade — Make Work Pay: threshold for triggering collective redundancy obligations (Deadline: 21 May 2026)
HM Revenue and Customs — Modernising and standardising company tax returns (Deadline: 2 June 2026)
HM Revenue and Customs — Business Systems Integration (Deadline: 2 June 2026)
HM Revenue and Customs — Extend Notification of Uncertain Tax Treatment (UTT) regime (Deadline: 4 June 2026)
HM Revenue and Customs — Reporting company payments to participators (Deadline: 10 June 2026)
HM Treasury — Advance Corporation Tax Reform (Deadline: 11 June 2026)
Insolvency Service — Corporate Civil Enforcement Reforms Consultation (Deadline: 17 June 2026)
Department for Business and Trade — Open for business: implementing a UK corporate re-domiciliation regime (Deadline: 19 June 2026)