There have been around 672,890 new startups in the UK only in the 2018 to 2019 tax year. In 2021 alone, 13 UK startups becomes unicorns (billion-dollar valuation). The number of startups is rising every year, and it has now become a common phenomenon. This also changes the attitude of the United Kingdom towards entrepreneurship.
One of the critical aspects that entrepreneurs need to deal with is money. Startups are expected to show results immediately, but there are specific requirements for getting funding from the investors. Keep reading the guide to find out some of the programs of the UK government for startups.
Initiatives of UK Government for Startups
According to the research conducted by Accelerator, around 72% of startups could not get any funding because of less experience and competence.
The government has introduced several programs for such entrepreneurs to enlighten their business ideas and make them more productive. In addition, there are many government initiatives taken to encourage startups and provide them opportunities to grow and prosper further. We shall take an insight on the government initiatives for the benefits of startups in the UK, which includes:
The Enterprise Investment Scheme (EIS)
EIS is a program mainly designed for those with a pretty good idea about their business and want to expand it into a bigger market. If you meet the criteria, then this program is designed for you. Moreover, you will get more tax reliefs under this scheme.
Seed Enterprise Investment Scheme (SEIS):
This initiative is mainly meant for small businesses that can help them access the funds required for their business expansion. SEIS was introduced in 2012, and over 2000 startups have already taken advantage of this government program.
The Seed and Venture Capital Funds
It is another initiative by the UK government to encourage entrepreneurs in the country. These funds are designed for business startups which can give them capital, mentorship and anything else needed to develop their business ideas. There was a total investment of £60 million in various startups that successfully met the criteria.
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The Angel Co-Funding Scheme
This scheme plays a vital role in the startup business industry of the UK. This program provides up to 85% for early-stage businesses and 50% for seed-stage startups.
EIS tax relief
The investors are allowed to withdraw all the contributions without any tax liability in the case of EIS.
UK Startup Visa
The UK Startup Visa is a new route into the UK that allows entrepreneurs to start up or set up their businesses quickly and easily. It was introduced in 2014 by then Prime Minister David Cameron as part of an initiative to stimulate growth in early-stage companies.
The points-based system allows anyone with the ability to create ten jobs and £50,000 of investment in their business to apply for a visa. It’s expected that successful applicants will need to have some experience of running a business and demonstrate they can fulfil their visa requirements through English language skills and sufficient finances – although there is no set threshold.
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Moreover, you can also create a branch of your business or startup in the UK to expand it further through a sole representative visa.
Conclusion
The UK is considered a startup hub, and many startups from different parts of the world open their headquarters here. It is mainly because of the government initiatives and generous support for these business ideas. For example, the government has waived the visa fee for entrepreneurs who want to move their startup office to the UK. This trend is expected to be continued, and soon, there will be more opportunities for the business founders.
