Funding to Flourish: The Case for Tax Relief on Early Stage Investment

The United Kingdom has become the primary destination in Europe for equity investment. This is in no small part because of a favourable set of tax reliefs, chief among which are the Seed Enterprise Investment Scheme (SEIS), the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs).

Despite the government saying that it is keen to update and safeguard these schemes, none of the necessary legislation to do so has yet been passed, and uncertainty about their futures is already having a negative impact. In Funding to Flourish, Aria Babu makes the case for tax reliefs on growth investment, and explains how the government can ensure Britain continues to have a flourishing startup ecosystem as a result.

Supporting SMEs Successfully

There is a renewed focus to grow the economy at a faster rate. Achieving this will require many changes to be made, but returning productivity growth to historic trends will be essential. Within this puzzle, attention will need to be paid to small businesses in particular – which evidence suggests have dragged on overall productivity in recent years.

In Supporting SMEs Successfully, we assess some of the current government support programmes for SMEs to boost their productivity. Our central finding is that while existing interventions are well intentioned, and in many cases working well for the businesses using them, more could still be done to ensure they are as effective as possible.

Space Startups and Scaleups

The space sector has changed enormously over the last few years, increasing in importance globally for economic growth, for security and for international partnership. As we look forward, ever more of the major challenges we face as a planet will have solutions, or parts of solutions, from space. The economic development of space to support the sustainable development of Earth is a critical opportunity for the UK.

Entrepreneurship Education

How can we equip young people with the skills to succeed in a fast-changing world of work? Entrepreneurship Education, a new paper by Finn Conway for the APPG for Entrepreneurship, explains the benefits of teaching young people how to start and grow a business. The report reveals that while young people have a massive desire to work for themselves and employers value enterprise skills, entrepreneurship education in schools is not integrated into the curriculum and England, unlike many other European economies, lacks a specific entrepreneurship education strategy.

The report calls on the Government to develop and publish a Youth Entrepreneurship Strategy for Schools, which would set out key skills it wants young people to develop, and to provide funding to encourage entrepreneurs from more representative backgrounds to visit and engage with schools.

Sharing Economy

The Sharing Economy has been a key growth pillar for the UK economy. Over the past decade, venture capitalists have invested £3.47bn in 465 sharing and on-demand economy businesses, according to data provider Beauhurst. While almost half of the British public use sharing economy apps to access goods and services.

To better understand how the UK can best support entrepreneurship and innovation in the sharing economy, the APPG for Entrepreneurship held a call for evidence and heard from a range of entrepreneurs, researchers, and business groups on the impact of Government policy, such as taxation and regulation, on this innovative sector.

Although the sector has grown rapidly in the UK - and offers clear benefits for the Treasury, consumers and for access to earnings opportunities - sharing economy entrepreneurs expressed concerns about the direction of policy. In particular, changes to tax and regulatory policy could have a significant impact on investment in the sector.

This APPG for Entrepreneurship report sets out the key issues that entrepreneurs in the sharing economy are concerned about. It advocates for a continued level-playing field on tax and for preserving the regulatory environment that has allowed the sector to flourish, while also empowering platforms to prioritise standards.

Enterprise Education

To thrive in the modern world, Britain’s next generation must be adaptable to change. Up until relatively recently, a job for life was both possible and preferable. It’s increasingly neither. Universities have been central to many of the great intellectual revolutions across history – now they must embrace enterprise education to imbue students with the necessary enterprising skills to flourish in the twenty-first century.

Government has a role to play. Political action — or inaction — has significant repercussions for how enterprise education is delivered. This report aims to inform the government about the successes, challenges and opportunities for delivering enterprise education at universities. Its recommendations are based on responses to a Call for Evidence and aim to work with the grain of the latest thinking and practice.

Women in Leadership

The UK needs more early-stage businesses achieving longer-term survival and scale. Supporting female entrepreneurs is not just about increasing the number of women-owned businesses: it is about raising their performance and growth potential. Not only will this lead to more established SMEs contributing more to economic growth, but they could also serve as inspiration to young girls.

As more and more women turn promising ideas into thriving businesses, they will make up a greater share of entrepreneurial role models, thereby encouraging more women into the pipeline – from schoolgirls considering STEM to founders scaling big. According to our survey, less than a third of women now think gender has been a hindrance to success. However, the figure for men is a negligible 1 per cent. 

Tax Reform

It is vital that, as Britain leaves the European Union, we are one of the best places in the world to start and grow a business. Getting tax policy right is key to creating a business environment that fosters entreprenerurship. Tax reform can deliver faster economic growth, boost employment and raise wages.