In the recent years, London is being labelled as the new Silicon Valley. A plethora of start-up incentives are available from the UK government and other organizations
London happens to be the ideal location for founders from Asia, Africa and Latin America to establish their startups remotely. The capital of the United Kingdom is a melting pot of various cultures, skilled individuals, and creative workplaces, making it an ideal location for entrepreneurs searching for the right kind of inspiration.
Some of the major benefits of establishing your startup in London are:
UK Governments Startup Schemes SEIS and EIS
The Seed Enterprise Investment Scheme (SEIS) is a tax-incentive program designed to help small, early-stage businesses acquire capital by providing tax relief to individuals who buy new shares in these businesses. It works in tandem with the current Enterprise Investment Scheme (EIS), which provides tax benefits to investors in higher-risk small businesses. SEIS allows companies to raise up to £150,000 while EIS allows them to raise up to £5 million.
This plan was created by the government in an attempt to alleviate the challenges that start-ups experience in getting funding. Although this may appear to be a really positive effort, it is crucial to remember that the government only wants the proper firms to apply and be authorized.
For investors who invest in a firm approved under SEIS, income tax reduction is available for up to 50% of the cost of any shares. Furthermore, capital gains tax reduction is possible on the sale of such shares. Investors may be allowed to deduct part of their losses from their taxable income if the firm goes bankrupt. These tax advantages encourage investment in start-ups, which have a high risk of failure.
Research & Development Tax Credit
R&D Relief is another potentially useful resource for new firms. This is a type of tax relief intended for SMEs who have a research and development component to at least portion of their overall operations, as the name implies. R&D Relief is a type of Corporation Tax Relief that can help you save money on your taxes.
There are two options for claiming assistance under this program, and which one you choose will be determined by the size of your firm or organization. Both of these schemes are self-explanatory, with the SME Scheme focusing on small and medium-sized businesses (SMEs) and the Large Company Scheme on larger corporations.
The tax relief on allowed R&D expenses is 225 percent under the SME program, which means that for every £100 of qualifying costs, your firm or organization’s taxable income might be lowered by an additional £125 on top of the £100 spent. If your business is losing money, you may be entitled for a cash return. You should study the definition of qualifying costs carefully, although development expenditures, which are one of the key costs for a technology business, are generally covered.
Grants: Innovate UK
Smart Grants, which range from £25,000 to £250,000, are available from Innovate UK (previously Technology Strategy Board) to a variety of businesses. Proof of Market (£25k, 60% match paid), Proof of Concept (£100k, 60% match funded), and Development of Prototype (£250k, 45 percent match funded) are the three types of Smart Grants offered. Because the sort of grant you apply for is based on a variety of factors unique to your firm, it’s a good idea to familiarize yourself with all of the terms and conditions before submitting an application.
Growth Program Vouchers: UK Government
Small businesses benefit greatly from the UK government’s growth program vouchers. This is a government initiative that provides SMEs with access to a variety of strategic business guidance. When you apply for this initiative, a number of businesses will be given a coupon worth up to £2,000 at random. This coupon covers half of the cost of any advise provided.
Incubators & Accelerators Programs
Courses are offered by business incubators and accelerators with the goal of assisting small firms to develop fast in a short period of time. In exchange for this, such programs may be given a stake in the company. In exchange for an initial seed financing of about £20-£30K, this often works out to around 5-10 percent equity. Accelerator programs typically run six months, but they might last as little as three months or as much as a year. Businesses will be given cash, visibility, and access to networks of angel investors and experienced mentors throughout the process.
Easy Access to VC Funds and Angel Investors
When it comes to venture capital investors, the UK Capital is awash with them. London is attracting an increasing number of individuals wanting to invest in the next big thing as it becomes more of a startup centre. Since 2016, London startups have received $34 billion in funding, and this amount is expected to rise as more up-and-coming firms attract investors’ attention. Can London’s thriving startup scene persuade you to open a business there as well?
Global Prestigious City
It’s simple to understand why London is home to so many worldwide companies. For starters, London has an incredible diversity of cultures, which means there are always new people to meet and new foods, events, and activities to try. Living and working in a diversified and lively city means you’ll never run out of ideas or views to explore, which is especially useful when you’re just getting started.
If your firm does business abroad, London offers a diverse pool of bilingual, if not trilingual, employment seekers with abilities ranging from French and Spanish to Bahasa and Tagalog. You are also well linked to the rest of the globe, with five major airports, making international business visits simple and the attraction of a work vacation abroad all the more appealing.