Latest news with #EnterpriseInvestmentScheme
Yahoo
26-05-2025
- Business
- Yahoo
How getting ahead on your tax return can help cut your tax bill
If you do a tax return, there's a key date to be aware of in May. If you're completely self-employed you can get cracking on your tax return on the first day of the tax year on 6 April. However, if you get any of your income from employment, you'll need to wait for your P60 to arrive, showing the salary and benefits you got this year. Your employer has to give you this by the end of May, so this is the time to get stuck in. Nobody would blame you for wanting to put off the boredom and anxiety of a tax return to the last possible second. In fact, more than 730,000 people left it to the last day in January this year — so you're far from alone. Unfortunately, leaving it to the last minute just makes the whole thing more stressful and prone to mistakes — plus you miss out on the chance to do a few clever things that can cut your tax bill. So there's plenty to be gained from starting now. It makes sense to put money aside for your tax bill as you go through the year, so you can pay your bill from this reserve. However, sometimes things don't go to plan, and you could end up with a shortfall. Regardless of when you file, you have until 31 January to pay, so you have months to put the extra cash aside. Read more: How to tell if you're rich A penalty is charged if the tax is not paid by the due date. HMRC also charges interest on unpaid tax. You can use the Budget Payment Plan service to set up weekly or monthly direct debit payments to spread the cost. This may not work for anyone with a particularly lumpy income, but can be useful for anyone who could do with some help managing payments. Most of what you do now will only affect your tax bill for the current tax year, but there's something known as "carry back", where you can do something today to cut the tax bill you're filing. You can use this if you're a higher or additional rate taxpayer who gives money to charity, and claims the extra gift aid through their tax return. You can make a donation now and include it in the tax return you're filing. This is particularly useful if your income is going to fall below a tax threshold this year, because you can claim gift aid in a year when you were paying a higher rate of tax. Another carry back rule applies if you've invested in an Enterprise Investment Scheme (EIS) in the current tax year, and you want to carry income tax relief of 30% to the previous year. Payments don't have to be in until January, but if HMRC owes you money, your refund will be processed now, so you should get it sooner rather than later. If you spent ages digging out details of interest payments, dividends or profits on share sales, consider consolidating to simplify things — bringing together things like savings and investments so they're easier to manage. Of course, none of this takes away from the fact that a tax return can be a fairly joyless experience. If you find yourself putting it off in the coming weeks, it's worth thinking whether you might want help from a professional to get it over the line. At this time of year, they're far less likely to be busy, so you can shop around for a cost-effective more: Who wears the financial trousers in your relationship? How to plan for retirement and track your pension pot income Why it's important to plan for retirement with your partnerError in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Forbes
29-04-2025
- Business
- Forbes
What's Behind Britain's Growth Funding Gap? A VC View
James Codling, Managing partner at Volution Ventures says VCs can be too stage specific 'We need a holistic approach to investment in the U.K.,' says James Codling. 'It can't remain as an amazing market for Seed and Series A, but with nothing when you get to growth. That just doesn't work.' Codling is the Managing Partner at Volution Ventures, a London-based VC that has just announced the launch of a $100 million fund focused on supporting companies in sectors such as fintech and enterprise software. Created in partnership with Japanese investment company SBI, the fund is intended to play a part in addressing a thorny problem that afflicts the United Kingdom's venture ecosystem - namely, a relative shortage of growth-stage capital. It's a problem ackknowledged by, the British Venture Capital Association in its latest report on U.K. VC finance. As the report points out, U.S. firms raise twice as much capital as their British counterparts, with the gap being much larger at later funding rounds. The BVCA also notes that the dominant presence of overseas investors at later stages is a factor in British startups relocating abroad, just at the point when they begin to generate real value. And even the jump from Series A to Series B can be difficult. Volution cites Dealroom figures suggesting that conversion rates have dropped by 50% in five years. 'The growth journey from Series A onwards is one of the toughest that any founder will ever go on,' says Codling. So why is that the case? Well, at least partly because founders often struggle to meet the expectations of VCs. As Codling points out, once a company moves beyond series A, investors are looking for tangible evidence of execution and delivery. 'Founders get very excited when they raise Series A, but to attract growth finance, they need to be ten to twenty times Xing where they are at Series A," he says. It's not just about revenue growth and profits. Codling says companies need to build out their systems, processes and teams, along with their sales and distribution models if they are to successfully scale the funding ladder. However, there are also structural factors at work. Successive UK governments have taken action to encourage investment in startups, with the tax system playing an important role. Initiatives such as the Enterprise Investment Scheme, British Patient Capital and the regulation of Venture Capital Trusts have all provided tax breaks for investors. This has generally been considered to be a good thing, but it can skew the market. 'These schemes don't really support late-stage investment,' says Codling. And as he sees it, there is a need to encourage support for businesses at every stage. 'The UK is phenomenally good at driving the creation of companies that can access Seed and Series A. But if the funnel isn't bigger, we won't be able to support companies as they grow," he says. This, he says, should be of concern not just to founders but also to the government and citizens alike. If taxpayer money is poured into supporting early-stage companies who struggle to raise the finance they need at a later point in their development, there is a risk that the cash will be wasted. So Codling argues for a more 'holistic' approach to investment on the part of VCs. Rather than seeing themselves as specialising in Seed, Series A, Series B, they should provide funds for good companies throughout their journeys. In other words, they should become less stage-focused. That might be a big ask at a time when VCs are adapting to a market in which valuations have fallen and exits are thin on the ground. So what is giving Volution the confidence to invest across stages with the aim of supporting companies from Seed to growth? Well, there are opportunities. Codling says Volution's approach is to align with the government's emerging 'industrial strategy.' What that is, isn't yet entirely clear, but it is likely to include fintech, AI, defence, energy, biotech and deeptech. These are sectors that will drive growth in the UK while also having the potential for international sales. Currently, the fund favors businesses with revenues between $5 and $20 million, with a current focus on fintech and AI-driven enterprise software. Stepping back to look at policy, Codling says current business support strategies could be better directed. 'There should be more emphasis on venture going towards a long-term growth strategy,' he says. 'Taxpayers' money might be better spent on growth drivers.' By that, he means businesses that could contribute significantly to boosting the U.K.'s flatlining growth. The government is addressing later-stage funding through its Mansion House accord, an agreement with pension funds aimed at directing more institutional money into scaleups. However, Codling says current regulations on fees make it difficult for institutions to align with VCs. The launch of Volution's fund is just part of a bigger and quite complicated picture. While late stage finance is recognised as a problem, figures published by HSBC Innovation Banking and Dealroom suggest that in first quarter of 2025, breakout deals (Series B and C) accounted for the bulk of capital raised ($1.8 billion) while later-stage financing amounted to $1.7 billion. The same report notes that the UK has created 185 unicorns. However, these headline figures can disguise the problems faced by individual companies. Looking forward, the creation of a framework that supports more growth-stage companies remains the next step in the evolution of the U.K.'s innovation economy. .
Business Mayor
23-04-2025
- Business
- Business Mayor
How to Help UK Start-ups Flourish
You're reading Entrepreneur United Kingdom, an international franchise of Entrepreneur Media. Kecsmar, who has experienced firsthand the struggles and triumphs of building a tech startup in the UK, offers a sharp critique of the current support available for early-stage ventures. Despite initiatives such as the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), and R&D tax credits, UK startups face growing barriers to success. Funding: A persistent hurdle} For Kecsmar, one of the most pressing issues facing startups is access to funding. 'Funding remains a major challenge, with early-stage investment becoming harder to secure,' he says. The numbers support his claim: in 2024, just €16.5bn was invested in UK startups, the lowest since 2018, and much of that went to later-stage companies. The implication is clear: the funding ecosystem in the UK is increasingly skewed toward scaleups, leaving early-stage startups struggling for attention and resources. 'This suggests we're going backwards in the UK in this regard,' Kecsmar notes. This funding gap must be addressed to allow more startups to reach maturity. The government could play a crucial role here. Kecsmar proposes partnerships with major tech firms to offer discounted cloud services and AI tools to startups – critical resources for companies in their infancy. Beyond this, tax credits for office space and transport could lower operational costs, easing the financial burden on early-stage businesses. The benefits of government programs Despite the challenges, Kecsmar remains a strong advocate for the government's existing support mechanisms, particularly the R&D tax credit program. 'Government programs like R&D tax credits have been invaluable for Antavo,' Kecsmar explains. These credits have allowed Antavo to fund its innovation team, Antavo Labs, which is central to the company's development of cutting-edge loyalty technology. The R&D tax credit has allowed Kecsmar's team to experiment with new ideas without the constant pressure of financial constraints. 'By reducing the financial burden of innovation, these credits have allowed us to stay ahead of the curve,' Kecsmar says. 'They've been key to accelerating our product development and growth.' However, Kecsmar is quick to point out that these programs need to be more widely available and targeted at the very startups that need them the most. If the UK is to remain competitive, investment in R&D, particularly in emerging technologies, should be increased. What can be done to help start-ups grow? Despite the successes of existing programs, Kecsmar is not convinced that the current climate is conducive to fast startup growth. The funding shortfall is just one part of the equation. 'We need a more founder-friendly ecosystem,' he insists. The current system, he argues, makes it difficult for startups to access the funding, talent, and support they need to thrive. The UK must also be more open in terms of talent acquisition. Since Brexit, the movement of skilled workers has been hampered, creating a talent deficit in many sectors. For Kecsmar, solving this issue is critical. 'Making it easier for skilled workers to move to the UK would be a game-changer,' he says. Allowing greater flexibility in hiring and immigration would provide startups with access to a global pool of talent, something that is especially crucial in the fast-moving tech sector. A call for regulatory reform Beyond funding and talent, Kecsmar highlights the need for regulatory reform. He argues that blanket regulations, particularly in fast-developing fields such as AI, could stifle innovation. 'We need reduced AI regulations for startups only, up to a certain size,' he explains. Kecsmar emphasizes that these regulations should still include ethical guidelines and oversight, but the imposition of heavy rules could prevent small firms from competing effectively with their global counterparts. The UK government, according to Kecsmar, should consider introducing a 'start-up exemption' – a form of regulatory flexibility that would allow smaller businesses to operate under more lenient rules, at least during their early years. Such a move could help level the playing field with startups in the US and China, where tech regulations are often less restrictive. Investing in infrastructure Beyond policy reforms, Kecsmar stresses that the UK must continue investing in technological infrastructure if it is to remain a global leader in innovation. Cuts to tech and AI funding in 2024 – totalling £1.3bn – have raised concerns that the UK risks losing its position as a top destination for startups. 'There's a very real chance that the UK has already lost some top talent to the US,' Kecsmar warns. If the UK is to remain competitive, the government must reverse these cuts and prioritize investment in emerging technologies. Kecsmar also proposes tax incentives to encourage the hiring of apprentices and interns by startups. By reducing National Insurance costs for companies that take on young workers, the government could help alleviate some of the financial pressures faced by small businesses while also addressing the skills gap. Competing on the global stage Startups in the UK are not only competing with each other – they are up against ecosystems in the US, China, and beyond. The government must understand that UK startups are not operating in isolation. As Kecsmar succinctly puts it: 'We need to look at the global stage. Who are startups in the UK competing against, and what are their ecosystems like?' The UK's future as a global hub for innovation depends on how effectively it can compete with these other ecosystems. To do so, the government must make bold moves to improve access to funding, reduce regulatory burdens, and foster a more open and competitive talent pool. The UK has a long history of nurturing entrepreneurial talent, but the landscape is changing. If the government is serious about fostering a thriving startup ecosystem, it must invest more in technological infrastructure, reduce regulatory barriers, and create an environment where talent can flourish. The path forward is clear: better funding, smarter regulation, and a more flexible approach to hiring and innovation will ensure that UK startups remain competitive on the global stage. As Kecsmar concludes, 'A more founder-friendly ecosystem with improved funding access, scalable support, and a more open approach to hiring would help unlock the UK's full entrepreneurial potential.' Only with these changes can the UK remain a leader in the global innovation race.
