How the UK government supports technology startups


The United Kingdom is the second-best country in Europe for startups, according to an analysis of economic data by consumer research firm NimbleFin, but the British government has a mixed reputation in the startup community.

At the 2017 Consumer Electronics Show (CES) in Las Vegas, event organiser Garry Shapiro said the UK government's lack of support for start ups attending the event was a "source of embarrassment", and the current Brexit uncertainty has made the need for help bigger than ever.

The government has since introduced or updated the support it offers to startups. Here are the main resources it provides, from hard funding to soft advice.

Read next: How the government can keep more startups in the UK

1. Funding

The government offers several funding routes for startups. They can apply for one of the range of government grants run by the Department for Business, Energy & Industrial Strategy or try the Start Up Loans scheme, which offers loans of up to £25,000 at a fixed interest rate of six percent per annum for new business ideas. Successful applicants also receive well as guidance on writing a business plan and up to 12 months of free mentoring.

There is also a range of funding competitions offered by Innovate UK, which funds and connect UK businesses to develop the new products, processes and services. Check the agency's live list of competitions to find out if any could help your business.

Businesses setting up shop in the capital can seek support from the London Co-Investment Fund, a programme established by the London Economic Action Partnership (LEAP), which contributed £25 million to the fund, supported by the Mayor of London, and delivered by Funding London and Capital Enterprise. The money is earmarked for investment in seed rounds of between £250,000 to £1 million.

Other options include the Seed Enterprise Investment Scheme (SEIS), which offers tax relief to individual investors who buy new shares in a company, Research and Development tax credits, which allows companies to claim back R&D costs up to two years after the end of the accounting period the costs relates to, and the EU's Horizon 2020 funding pot, which UK companies may still have access to after Brexit.

Read next: How to fund your startup?

2. Support

In terms of soft support, the Department for Business, Energy & Industrial Strategy maintains a database of schemes offering expertise and advice, while the Business is Great website provides information on subjects ranging from how to protect your intellectual property to tax advice.

Tech.Londonoffers advice on setting up in the capital, including local workspaces, events, mentorship programmes, job boards and funding tips, as part of a collaboration between the Mayor of London, investor portal Gust and lead sponsor IBM. London & Partners also offers support and advice for scale-up companies looking to set up shop in the capital.

Overseas entrepreneurs can seek free guidance from the Department for International Trade's (DIT) Global Entrepreneur Programme (GEP), while startups in the capital can apply for a place on Techstars London, an accelerator providing access to investment, mentorship and collaboration with other top entrepreneurs.

Further guidance is available at Tech Nation, a government-funded body which provides a range of support for technology companies. Its schemes include the Future Fifty, which has given the likes of Just Eat, Shazam and Skyscanner access to expertise across both the public and private sectors, and the Digital Business Academy, a free online learning platform for budding tech entrepreneurs to learn the skills they need to start, grow or join a digital business.

The government has also tried to attract startups to the country by offering one of the lowest corporation tax rates in the G20 and the ability to register a company within 48 hours.

Read next: National AI strategies in the world's most powerful countries

3. Visas

The tech sector has regularly warned that access to the international workers they need to bridge the digital skills gap is too restricted. These concerns have been amplified by the vote to leave the EU, as the resulting uncertainty about the UK's future and the wave of anti-immigrant rhetoric risked damaging the country's ability to attract top talent to its shores.

In 2017, the government tried to allay these concerns by doubling the number of visas available through the Tier 1 (Exceptional Talent) route from 1,000 to 2,000 a year. Applications are assessed by an independent panel of experts against the eligibility criteria in the guidance of Tech Nation, the body designated by the Home Office to endorse applications for the visa. Applicants should be deemed either an "Exceptional Talent" proven to be a recognised leader, or to have "Exceptional Promise" as an emerging leader.

In March, two further visa routes with no cap on the number of applicants came into effect as replacements fo the Tier 1 (Graduate Entrepreneur) visa: the Start-up visa and the Innovator visa.

Foreign workers who want to run a business in the UK can apply for an Innovator visa if their idea is endorsed by an approved body, they're from outside the European Economic Area (EEA) and Switzerland, and they meet the remaining eligibility requirements. They must also have at least £50,000 in investment funds for a new business, but do not need this if their business is already established and endorsed for an earlier visa.

Alternatively, they can apply for a Start-up visa if they're from outside the European Economic Area (EEA) and Switzerland, meet the remaining eligibility requirements and are endorsed by an authorised body that is either a UK higher education institution or a business organisation with a history of supporting UK entrepreneurs.

Read next: Will the tech sector stand up for immigrants after Brexit?

4. Connectivity

The UK government has a patchy record on digital connectivity, failing to hit many of its targets for superfast fibre-optic broadband provision and lagging behind the internet access available in many other European countries.

In 2018, the government outlined its latest plans to make the UK a world leader in digital connectivity in its Future Telecoms Infrastructure Review. It aims to give the majority of the UK population access to 5G, connect 15 million premises to full fibre broadband by 2025, and provide full fibre broadband coverage across all of the UK by 2033.

The government claimed that by December 2017 it was providing superfast broadband coverage to 95 percent of premises and is introducing a broadband Universal Service Obligation that by 2020 will give everyone in the UK a clear, enforceable right to request high-speed broadband. has provided access to basic broadband (2Mbps) for all for those who do not currently have coverage otherwise supports the stimulation of private investment in full fibre connections through a programme that is currently funded through March 2021

Anyone who currently experiences broadband speeds of less than 2 Megabits per second (Mbps), can apply for a Better Broadband Voucher of up to £350 to spend on installing a basic broadband service with download speeds of at least 10 Mbps.

Read next: A timeline of UK 5G development

This story, "How the UK government supports technology startups" was originally published by

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