It is important the government have a clear post BREXIT strategy for the technology sector and negotiates continued access to the single market which is key in generating jobs, foreign investments and attracting talent to the UK.
Funding is critical to the technology sector, especially given the “start-up” nature of many technology businesses which use this funding for initial innovative exploration before developing something which can be brought to market and exploited commercially.
There is great uncertainty following BREXIT with concern that EU funding will be removed to the detriment of innovative technology businesses, to date the government have taken some positive action to allay fears with the Chancellor Philip Hammond guaranteeing EU funding beyond the date UK leaves the EU, however more is needed.
The government have a great opportunity to offer increased grant funding and enhance tax incentives such as R&D tax reliefs, Patent Box and EIS/SEIS investor reliefs now the constraints of EU State Aid regulation may be lifted.
There has always been strong empirical evidence that tax incentives around innovation and R&D have stimulated growth and these along with investor tax reliefs such as EIS/SEIS are critical in delivering much needed funding to the technology sector which in turn delivers growth back to the economy as these businesses grow.
People are the heart of any business in the technology sector, they drive the business and the innovative culture. Clearly access to the best and brightest minds across Europe will be a challenge following BREXIT but retention and motivation of key employees is equally important in any technology business.
Employee incentivised tax reliefs such as the EMI scheme which offers employees future share ownership through options which can be linked to performance criteria are valuable tools businesses can use to retain and motivate key employees. The government have realised the value of an employee ownership model in driving business growth, such reliefs should be enhanced along with further reliefs which encourage businesses to employ and retain people who look to drive innovation in the technology sector.
Get more input on the 2016 Autumn Statement implications for the Technology sector team.