According to Sifted, UK finance minister Rachel Reeves unveiled an Autumn Budget with mixed policies for startups. The government doubled the Enterprise Investment Scheme (EIS) limits, allowing companies to now raise £10m annually and £24m lifetime, with knowledge-intensive firms hitting £20m and £40m. It also expanded the Enterprise Management Incentives (EMI) framework and announced a three-year stamp duty exemption for UK-listed firms. However, it reduced upfront tax relief for Venture Capital Trust (VCT) investors from 30% to 20%. The Budget followed a recent call for evidence on tax support for entrepreneurs. Founders and economists largely labeled the measures incremental, with one calling it a “missed opportunity” for growth.
The Good, The Bad, and The IP Problem
So, the EIS increase is a clear win. It lets growing companies tap into more capital for longer, which is crucial for scaling. Eli Khrapko from Wype called it a “positive surprise.” But then there’s that VCT relief cut. It’s a classic case of giving with one hand and taking with the other. You’re expanding the pool of eligible companies but potentially shrinking the pool of willing investors. Weird move.
Here’s the thing, though. The real gripe from experts like Dr. Joseba Martinez isn’t about these schemes. It’s about the stuff that wasn’t addressed. The UK’s big gap? How it taxes intellectual property. Right now, if a startup buys a critical piece of software or a patent, they can’t deduct the full cost upfront like they can with a machine. They have to write it off over 15 to 25 years. For a cash-strapped scaleup, that’s brutal. It hurts cash flow and makes investing in growth—the very thing the government says it wants—way harder. Fixing that would be a game-changer.
Talent Troubles and The Visa Squeeze
Now, let’s talk people. The Budget was pretty quiet on talent, and that’s a huge problem. The UK’s university system is a powerhouse for innovation, but funding wasn’t a focus. More critically, visa rules are tightening. Data from a Home Office report shows a 13% drop in study visa applications, with dependent applications crashing by 85%. The graduate visa is being cut from two years to 18 months, and English language requirements are going up.
For startups in AI, engineering, or digital marketing, this is a direct threat. You’re constricting the pipeline of global talent right when you need it most. Founders are already talking about looking at remote teams abroad as a solution. When your home base makes it harder to hire the best, you find the best somewhere else. It’s that simple.
The Unaddressed Structural Headaches
Beyond taxes and visas, there are bigger, stickier issues the Budget ignored. Cost pressures, especially in London, are insane. High salaries to match high living costs strain young companies. And then there’s the Brexit-shaped elephant in the room. Martinez points out the obvious: the UK is a smaller market now, cut off from its nearest neighbor.
Market access matters. A lot. If you’re going to absorb the huge fixed costs of building a tech company, doing it in a place with easy access to 450 million customers is a pretty good incentive. The UK doesn’t have that anymore. Tweaking EMI schemes is nice, but it doesn’t fundamentally change that calculus for a founder choosing where to plant their flag.
So, Was It Enough?
Look, the consensus is clear. This budget was about treading water. It didn’t make things worse, but it absolutely failed to be catalytic. The UK has a decent foundation with EIS and SEIS, but the next stage of growth requires tackling the hard stuff: modernizing IP tax rules, reversing the talent visa squeeze, and honestly grappling with the post-Brexit reality.
Founders like Cult Mia’s Nina Briance say their confidence in the UK remains, but the Budget didn’t move the needle. And that’s the real summary. In a country that “desperately needs growth,” as Martinez says, playing it safe with incremental tweaks feels like a massive letdown. The opportunity was there. It just got missed.
