Tax Benefits

By

Emma J

Last Updated: 9, September 2024
 

The UK’s digital industry is thriving. Britain’s tech sector is a significant engine of growth, estimated to contribute around £72bn to the UK economy, representing 5% of the UK total.

The UK is populated by thriving tech clusters. For example London is leading in fintech and ecommerce; Bristol is leading the way in robotics and media tech is flourishing in Manchester; Edinburgh is succeeding in Artificial Intelligence, as is Newcastle in gaming; and Cambridge continues to be a beacon for bioscience and hardware. Gaming in online casinos offers thrilling experiences with a variety of games, from slots to live dealer tables. Non Gamstop casinos provide an expansive selection, ensuring endless entertainment. These platforms prioritize security and fairness, allowing players to enjoy their favorite games confidently while exploring new opportunities to win big.

A number of factors to combine here to create an incredibly fertile environment for starting and scaling a tech company:

  • The UK’s digital economy grew at 10.9% in 2011, higher than the average of 8.1% across the G20 countries
  • This is predicted to expand at a rate of 11% a year until 2016 creating an internet economy worth £221bn
  • The UK’s 1st App Developer Census report recently reported that the UK accounts for 32% of mobile app revenues in the EU. UK developers’ revenue is expected to exceed £4billion in 2014, via 8,000 companies. 45 per cent of the growth is expected to be outside London and the South East.
  • The conditions for entrepreneurship in the UK are optimum: a recent Nectar survey found that 80% of young people in Britain now say they would like to start their own business in the next five years.
  • Employment in the technology sector is expected to grow nearly five times faster than the UK average, and over half a million new entrants are required to fill IT professional job roles in the UK over the next five years.
  • If the digital economy was a traditional sector, it would be bigger than UK construction, education and utilities.
  • The UK Government is committed to ensuring British entrepreneurs, financiers and innovators have the best possible environment in which to operate
  • The strength of UK universities including our science and research base is world-class
  • The UK produces 14% of the most highly cited papers and our Higher Education Institutions generate over £3 billion in external income each year
  • In terms of academia, our knowledge base is the most productive in the G8, with a depth and breadth of expertise across over 400 areas of distinctive research strength
  • Tech City UK’s Future Fifty is a year-long programme for selected high-growth companies. It provides bespoke access to expertise within the UK government and across the private sector.
 

London is becoming a global force to be reckoned with. Currently growing faster than many other digital hubs including New York, the digital sector has been driving London’s economy:

    • Between 2009 and 2012, the digital sector in London grew by 16.6%
    • Between 2009 and 2012 the number of digital companies in London increased 76% growing from 49,969 to 88,215
    • 27% of all job growth in London comes from the digital sector, with approximately 582,000 people now employed by the tech/digital sector in London
    • Between 2010 and 2013 over 340 London tech companies attracted investment of over £1.47bn
    • Since 2010 London has experienced a 75% increase in the number of ICT companies investing in London from overseas. More ICT firms are investing in London than any other sector
    • Our startup scene is the best in Europe. According to a Telefonica/European Commission Report, London has 32 accelerators/incubators for startup companies, out of 50 in the UK as a whole
    • Recent research supported by Bloomberg suggests the tech and information sector in London, Southeast and East England – including Oxford and Cambridge – is growing faster than that of California
    • The same report also reveals that London is the world leader in financial technology, employing more workers in the sector than New York City and San Francisco Silicon Valley
    • London has more Fintech startups than anywhere else in Europe. It hosts Level39, Europe’s largest accelerator space for financial technology, which contains some 68 companies. In addition, the Techstars / Barclays FinTech Accelerator launched in June 2014 in Mile End
    • Major tech and digital companies have been brought into Tech City in the last three years from global markets including the US, Europe and Asia. In recent months US firm Box and social game developer Rekoo have located in London, joining the raft of leading tech companies – among them Facebook, Google, Twitter, Amazon, Cisco, Intel, Microsoft, FourSquare and Pinterest – already based in the capital.

If you would like to have more insight on the London’s digital industry download our annual report here.

 

Tax Benefits

The Government offers tax benefits for investors in early stage digital businesses:

  • The rate of R&D; tax credit for companies with fewer than 500 employees has been increased to 225%
  • The Patent Box Scheme which lowers Corporation Tax to 10% on profits from the development and exploitation of patents and certain other intellectual property in the UK has been introduced
  • The Seed Enterprise Investment Scheme (SEIS) provides 50% income tax relief for UK taxpayers investing in qualifying startups for the first £100,000 seed investment
  • The Enterprise Investment Scheme (EIS) offers 30% income tax relief for private investors – bringing the scheme in line with the relief available in contributions into venture capital trusts
 

There is a wealth of information highlighting why the UK’s digital industry is thriving. We aim to help you find this information quickly and easily.

Here’s a list of useful data and stats which show why the UK’s digital economy is in such good health, making the UK the ideal place to build and grow a digital business.

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