For a government elected on a promise of economic growth, it remains hard to identify clear policies that genuinely encourage entrepreneurship.
Entrepreneurship in the UK, a guide published alongside the autumn Budget, rightly highlights scaling and long-term retention as two of the biggest challenges facing British start-ups.
To avoid becoming merely an “incubator economy,” the UK must strengthen its appeal to entrepreneurs and stem the early sale of promising firms to overseas buyers. That requires a stable, long-term tax regime designed to attract and retain founders.
Current tax landscape
The Budget included measures to boost investment in UK companies, including doubling the amount firms can raise under the Enterprise Investment Scheme (EIS) and expanding Venture Capital Trust and Enterprise Management Incentive (EMI) schemes to help scale-ups attract and keep talent.
However, these were offset by a cut in VCT income tax relief from 30 to 20 per cent from April 2026, risking a drop in investment from high-net-worth individuals into early-stage UK businesses.