Zoopla bands with tech startups lobbying for tax breaks

The chief executives of Zoopla, King Digital and Tech City UK, and venture capitalists In­dex Ventures and Balderton Capital have joined 175 startup founders lobbying for changes to tax rules to maintain the capital’s status as the leading European tech hub

Calling themselves the Coalition for a Digital Economy (Coadec), the group has launcehd a Startup Manifesto, which identifies access to finance, skills, and tax as the top three issues facing start up companies and lists 24 suggestions for changes to the rules.

Top of the list is a commitment to keeping SEIS and EIS tax reliefs for the next parliament, followed by a call for the return of tax reliefs for Corporate Venture Capital (CVC).

The group also want to see the cap on Entrepreneurs' Relief removed and a lowering of the equity threshold to qualify for the tax relief.

It has also called for tax breaks for startup employees who volunteer with local schools, in order to improve the quality of IT teaching. This could include introducing an income tax relief for those who commit a specified number of hours per months, or a reduction or removal of employer national insurance contributions (NICs) for any suitably skilled employee who committed a certain number of hours.

The group says future government policy should support ‘disruptive innovation’, making clear that the role of the state is to encourage innovation and competition, with the minimum red tape needed.

It identifies recent Treasury policies for the fintech sector as positive in this respect, including allowing P2P lending to be included within ISAs and reforming payments regulation.

It says the next government should continue this support, including reviewing the major barriers around fintech innovation and suggests this should include looking at the regulation of cryptocurrencies such as Bitcoin.

HMRC, the group says, should take the lead in being one of the first tax authorities to establish a framework relating to tax, VAT and other compliance requirements related to cryptocurrency.

In addition, Coadec wants the government to look at how Anti-Money Laundering and Know Your Customer rules affect digital businesses, and how regulations should change once digital proofs and secure online identity assurance are the norm. It says more should be done to support startups in bidding for government digital contracts, claiming current rules are overly complex.

Other recommendations in the proposal include reinstating post-study work visas for non- EU graduates in a STEM (Science, Technology, Engineering and Mathematics) subject at UK universities and making  it easier, cheaper and faster to hire people from overseas outside the EU via sponsored visas. 

It also wants a review of the planning system and property regulations to increase the supply of affordable office space for startups and more investment in superfast broadband. 

Jon Bradford, managing director of Techstars London, said that the capital now has one of hte most vibrant and successful startup clusters outside of the US, regularly touted as a key rival to New York, due to government's initiatives to nurture this.

'But now is an important juncture: if we are to continue on this path of growth, we need to consolidate the accomplishments to date. The Startup Manifesto does an outstanding job of identifying and making the case for what needs to happen for Britain’s startup ecosystem to go from early traction to world-beating success,' said Bradford.

Pat Sweet |Reporter, Accountancy Daily [2010-2021]

Pat Sweet was the former online reporter at Accountancy Daily and contributor to the monthly Accountancy magazine, pub...

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