Autumn Budget 2025: What does it mean for the UK’s tech startup ecosystem?
After a turbulent few months of speculation, it is hoped that the delivery of one of the most highly anticipated and chaotic Budget’s in UK history will lead to greater stability across all business sectors. Markets have reacted without notable volatility. While the UK tries to maintain its reputation as a leading national force within the global tech ecosystem, investors and founders react to the Labour government’s latest fiscal policy changes.
Venture capital
Chancellor Rachel Reeves announced plans to change the UK’s Enterprise Investment Scheme to encourage further investment in UK startups and scaleups. The Chancellor also increased eligibility to allow scaleups, as well as startups, to access Enterprise Management Incentives from April 2026.
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Fred Soneya, co-founder & general partner at UK venture firm Haatch, said: “Increasing Enterprise Investment Scheme caps is noteworthy and should be praised. For over 30 years now, this scheme has been vital in channelling investment into early-stage companies, and by lifting the amount a company can raise through EIS the Chancellor will help ensure that the most promising scaleups—those already approaching their EIS cap—can access more capital to support their long-term growth.
“Widening the scope of Enterprise Management Incentives is a positive move. These allow small businesses to incentivise employees by offering them share options without NI or income tax liabilities, and it’s a powerful weapon in a startup’s arsenal as they battle to attract and retain the best possible talent. In the mission to ensure the UK remains as attractive as possible to entrepreneurs and, more importantly, a great country in which to scale a company, these little fixes can make a big difference, so the Chancellor has done the right thing today by ensuring more small businesses can leverage EMIs.”
“For the tech sector, leaving R&D tax credits alone was a good outcome. SMEs need certainty and stability if they are to plan for the future effectively—and this isn’t possible when policy and taxation are constantly changing, so the Chancellor was right to avoid the temptation to tinker with this.
“Similarly, the fact that some form of wealth tax wasn’t introduced is good news, even if the broader tax landscape has become less favourable across the past two Budgets. A targeted wealth tax would likely have a negative impact on private investments—such as the availability of private equity and VC funding for high-growth startups—making it counterproductive for productivity and economic growth.”
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By GlobalDataUK tech startup founders
Sasha Haco, co-founder and CEO of AI automation company Unitary said:
“If we want AI to genuinely raise productivity, the government must go beyond investment and needs to become an enthusiastic customer for startups.”
“As an AI founder, I see daily how much potential there is to make public services and regulated industries more efficient. If the UK wants to build and keep world-leading AI companies, procurement frameworks must reward technologies that deliver trustworthy, consistent automation.”
“As well as capital, founders need customers willing to adopt, test and scale innovative products. By using its own buying power, alongside targeted R&D programmes, the government can set the pace for the wider economy. That’s the clearest way to ensure the UK remains a global home for ambitious, high-growth companies.”
Dr Vibhor Gupta, founder & CEO of healthtech company Pangaea Data said:
Today’s Budget with £300m allocated to technology in the NHS strengthens the emerging AI innovation ecosystem, but what really matters is ensuring this ambition translates into tangible impact for the NHS and the millions of patients who rely on it.
“For the UK to improve patient outcomes, reduce waiting lists and boost productivity, the Budget must enable the NHS to become a confident customer of innovation. Supporting home-grown AI companies is not only good for patient care; it fuels economic growth, creates high-value jobs and strengthens the emerging AI ecosystem that the Government has rightly prioritised. A future-proof, data-driven NHS is within reach, and it will be central to both the nation’s health and the UK’s long-term economic competitiveness.”
Nik Kairinos CEO founder & CEO, Fountech AI said: “While the lead-up to this Budget has hardly been uplifting – marked by fiscal pressures, sluggish growth, and rising taxes – recent tech-focused measures at least indicate that the Chancellor is beginning to make the right sounds about supporting the UK’s tech industry.
“The plans for an AI Growth Lab, the creation of a Sovereign AI Unit to scale national capabilities, guaranteed payments for UK startups developing AI hardware, and the decision to maintain R&D tax credits all offer a glimmer of optimism. Taken together, they underscore an intent to back a sector that government forecasts suggest could add up to £400bn to the UK economy by 2030.
“But sounding supportive and being supportive are not the same. The UK tech ecosystem will only reach its full potential if business leaders can rely on broader economic stability. According to the Stanford AI Index, private investment in UK AI still significantly lags behind the US ($4.5bn vs $109.1bn), highlighting ongoing challenges in attracting investment, talent, and capital. The next step for policymakers should be clear: move beyond signalling and create conditions that not only support innovation today but also build sustained investor confidence, strengthen talent pipelines, and unlock the full potential of the UK’s pioneering tech sector.”
Industry groups
Russ Shaw CBE, founder of Tech London Advocates and Global Tech Advocates, said: “The three-year Stamp Duty Reserve Tax exemption for UK listings, along with targeted regional initiatives such as the South Wales semiconductor cluster and AI Growth Zones, signal support for sectors central to the UK’s innovation economy. In addition, increases to EMI and VCT/EIS limits, and higher thresholds for Knowledge Intensive Companies, will make it easier for investors to provide follow-on capital, helping ambitious businesses grow domestically.
“The Budget also includes steps to strengthen the wider innovation ecosystem. Entrepreneurship fellowships in universities will support commercialisation across the UK and build on existing UKRI investments, while the British Business Bank’s initiatives – including VentureLink and its five-year strategic plan to increase capital deployment – will help attract institutional investment into UK scaleups and improve access to growth capital.
“The government’s Call for Evidence on tax support for entrepreneurs is a positive step in engaging with the scaleup community, which could inform future policy to make it easier for ambitious companies to start, scale, and stay in the UK.
Janine Hirt, CEO of Innovate Finance, the industry body for UK FinTech, said: “The UK FinTech community was pleased to see the Chancellor acknowledge very early on in her budget speech the importance of supporting entrepreneurs and founders, recognising they are key drivers of growth across our country. We welcome her announcement of a call for evidence which will seek views on the effectiveness of existing tax incentives, and the wider tax system, for business founders and scaling firms, and how the UK can better support these companies to start, grow and stay in the UK.
“The Chancellor also adopted a number of measures that Innovate Finance and our Unicorn Council have consistently advocated for on behalf of UK FinTech to boost investment in startups and scaleups, and encourage listing on the London stock market. We called for fiscal incentives to help the UK stock market accelerate momentum by differentiating listing in the UK from other countries. The Chancellor listened and today announced one of our proposals – a stamp duty holiday of three years for the trading of shares in newly-listed companies. In addition, the Chancellor has implemented a set of changes recommended by our Unicorn Council to extend tax relief for investment in startups and scaleups, and employee share incentive schemes, significantly increasing the amount that can be issued through EIS, EMI and VCTs and the size of firms that are eligible. This should help unlock critical new investment into the FinTech sector.
Research & Development
Alessandro Maiano, co-founder & CEO, deeptech fund Wilbe said: “This Budget makes clear just how much responsibility taxpayers continue to carry in funding the riskiest stages of scientific discovery. With UKRI [UK Research and Innovation, is the UK’s national science and research funding agency] now deploying over £38.6bn towards government priorities, including £8bn for mission-aligned research and £7bn for backing innovative companies, public money is again underwriting the earliest, most uncertain phases of innovation.
“Yet while taxpayers fund the hardest part, the returns ultimately accrue elsewhere. Scientists have been underestimated for too long, often treated as grant recipients rather than builders. A stronger system would give them ownership from day zero, reduce dependence on slow grant cycles, and widen the pool of early funders willing to back their ideas at inception.”
“If the UK wants to become a true science superpower, public investment must be complemented by far greater incentives for private individuals, philanthropists and foundations to support early scientific discovery. Without that shift, taxpayers will continue to take the risk without ever sharing in the reward.”
Cat Mora, director of research operations at quantum company Phasecraft said: “We welcome the UK Government’s commitment to targeted investment in innovation and the message that if you build here, Britain will back you. Phasecraft’s work sits at the intersection of research and real-world application, and we strongly support efforts that streamline R&D funding, prioritise long-term partnerships in critical technologies like quantum and attract top global talent to the UK. Widening eligibility for enterprise incentives and expanding EIS schemes will go some way towards helping this. To stay ahead, the UK must back the quantum companies bringing real use cases to today’s limited hardware, not just preparing for the machines of the future.
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