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Tech startup taxes UK

Starting up a business is like trying to do a hill start in a car that needs to be pushed to get it started. Making sure you’ve got everything in place is a major headache so things will be missed but one thing that cannot be missed is the tax implications of opening up your new business. If you get on the wrong side of the taxman, you might end up in court. Thankfully, the Government offers tax benefits for investors in early stage digital businesses so the tech startup taxes for UK firms is actually quite attractive.
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Background

London is ranked as the top city for supporting startup technology businesses in Europe. In the European Digital City Index, London-based tech firms raised over £1 billion in investments from the UK. Part of the reason for this massive interest is the tax situation.

Company taxes

The Patent Box Scheme has recently been introduced. This lowers Corporation Tax to 10% of the firm’s profits from the exploitation of patents and intellectual property in the UK. Most tech firms can benefit from this scheme.

Investors

Investors will be needed to help establish your firm. Few of us have the money, experience and time to get a firm off the ground on their own so the following tax relief schemes help encourage investors to put their cash into your new business. The Seed Enterprise Investment Scheme is designed to encourage investors to put their cash into new businesses in the UK. This scheme provides 50% income tax relief for the first £100,000 for UK taxpayers who put their cash into startup firms who met the qualifying criteria. The Enterprise Investment Scheme (EIS) is another scheme that helps investors. This one offers 30% income tax relief to private investors.

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