October Budget 2021: what startups and scale-ups need to know

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Chancellor Rishi Sunak has announced packages aimed at helping innovation including an Angels programme, easing scale-up visas, extending business loans, and more.

Here are the plans announced in the 2021Autumn Budget and Spending Review that are relevant for innovative startups, scaleups and entrepreneurs.

Recovery Loan Scheme extended

The Recovery Loan Scheme has been extended until 30 June 2022. Finance will be available up to a maximum of £2 million per business. The government guarantee will be reduced from 80% to 70%.

Annual Investment Allowance 

The government has extended the temporary £1 million level of the Annual Investment Allowance to 31 March 2023. This will provide businesses with more upfront support, encouraging them to bring forward investment for any business investing between £200,000 and £1 million.

Regional Funds boost and Angels programme

There is a boost of £1.6 billion for the British Business Bank’s (BBB) regional funds, which provide debt and equity finance to SMEs. This will expand these funds into the North East and South West of England. It will also provide for the BBB to set up new regional funds in Scotland (£150 million) and Wales (£130 million), and to build on its existing programmes in Northern Ireland (£70 million).

There is also a £150 million additional commitment for the Regional Angels programme, which reduces imbalances in access to early-stage equity finance across the UK, according to the government.

There is also continued funding for the Start Up Loans Scheme, which provides loans and mentoring to people across the UK who want to start a business. 

Scale-Up Visa reform

A new Scale-Up Visa system that will make it quicker and easier for fast-growing businesses to bring in highly-skilled individuals was revealed. It will help "identify, attract and relocate the best global talent in key science and tech sectors" said Sunak, " to make our visa system for international talent the most competitive in the world".

R&D spending and tax

By the end of the parliament spending on R&D will be £20bn a year, an increase of 50%. In addition, Sunak announced that tax relief on R&D will change. It will expand to cover cloud computing and data.

Global Britain Investment Fund

The chancellor announced the Global Britain Investment Fund, which is a £1.4bn fund aimed to encourage foreign investment into UK businesses and attract overseas talent. The fund includes £354 million to support investment in life sciences manufacturing and more than £800 million investment in the production and supply chain of electric vehicles including in the North East and Midlands.

As part of the package a talent network team will aim to attract high-skilled workers to the UK through "innovation hotspots" initially based in US cities San Francisco and Boston and Bengaluru in India. 

The information contained in this article is correct at the time of publishing. We recommend that you carry out your own independent research to understand how this topic affects you and your business.

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