The Autumn Statement, unveiled by Chancellor Jeremy Hunt on Wednesday 22nd November 2023, had plenty of talking points for the entire UK population and across all industries. However, nestled within the speech were crucial updates that spell both opportunity, change and transformation for the tech sector in particular. In this blog, we outline these key tech sector highlights:

More R&D Updates

Given the innovation within the tech sector, any changes, uncertainty or disruption to the R&D tax credit scheme can have a huge impact on the wider sector.

Notably, the Chancellor has now merged the current RDEC (for larger companies) and Small and Medium Enterprise (SME) schemes for accounting periods on or after 1st April, as well as

The second R&D scheme for ‘R&D intensive companies’ also saw the criteria threshold for R&D intensity dropping to 30% (from 40%), meaning more companies will benefit.

EIS & VCT Extension

In really positive news for investors and startups looking to raise investment, the government confirmed they will extend the VCT and VCT sunset clauses until 2035.

Up until this announcement, there was concern in the industry as these schemes were due to end in 2025. This change will help provide certainty for entrepreneurs and investors in young companies at the heart of the UK economy. Unsure on EIS? See our previous guide to EIS and SEIS here.

Investment in Tech Industries

  • AI, Deeptech & Quantum:

Recognising the importance of the tech sector to the future of the British economy, the Government has announced significant regulatory reforms such as the extension of the Growth Duty and provided an additional £500m of investments in AI and compute.

  • ClimateTech:

While affirming intentions not to match the US Inflation Reduction Act, the Chancellor confirmed £4.5bn funding across eight advanced manufacturing sectors, emphasising ClimateTech, with a dedicated £960m Green Industries Growth Accelerator. Aligning with recommendations from Professor Dame Angela McLean’s review, these funds aim to navigate late-stage challenges faced by firms in ClimateTech.

Unlocking Funds to Drive Tech Growth:

  • Pensions:

The Chancellor shed  further light on the Government’s efforts to unlock pension funds for both savers and start-ups. The introduction of the BBB fund vehicle, plans to consolidate public sector funds, and a fresh injection of £50m into the Future Fund Breakthrough via BBB stand as testaments to this commitment. The government will also introduce a new Venture Capital Fellowship program to cultivate the next generation of investors for the UK’s renowned venture capital funds, supporting investment in the country’s most innovative and high-growth companies.

  • ISAs:

The upcoming inclusion of Long Term Asset Funds in IFISAs and the allowance for “fractional shares” within eligible ISA investments from April 2024 offer savers increased choices. These steps, coupled with unlocking pension capital, stand as pivotal means to encourage investment into transformative and innovative UK tech firms.

  • Harrington Review on Foreign Direct Investment

In parallel with the Autumn Statement, Lord Harrington’s review on foreign direct investment led to the Chancellor accepting all six recommendations. The establishment of a “concierge service” for overseas investors, an overhaul of investment grant processes, and increased resources for the Office for Investment mark key outcomes.

Spinouts Support

Given our close proximity to Cambridge, we fully understand the importance that university spinouts have on the wider economy. It seems the Government is also aware of their significance as they embraced all recommendations from a recent independent review of university spinouts. This includes advocating for reduced university stakes in spinouts, enhanced support for founders, and a new £20m fund aiding prospective founders in demonstrating the commercial viability of their research in UK universities.

Smart Data, Open Banking, and Payments

The Government’s commitment to unlocking Open Banking’s potential includes legislating Open Banking over the next year, expanding its reach beyond the CMA 9. Additionally, plans to repeal certain payment authentication rules align with the upcoming ‘National Payments Vision,’ while a forthcoming “Smart Data Big Bang” across various sectors signifies significant strides.

These advancements are pivotal for the tech landscape. Stay tuned for further developments as we navigate these transformative changes together.

What Next?

The full Autumn Statement can be found here, which covers everything from the national insurance and full expensing for capital expenditure changes. However, if you would like more detailed, one-to-one advice on any of the points raised in the Chancellor’s speech, please contact us.