Britain has set out a refreshed plan to make the UK a place where company founders “start, scale and stay”. This shift in emphasis recognises the UK’s world‑class start‑up scene, but persistent struggles in turning young businesses into large, globally competitive companies remain.
HM Treasury’s Entrepreneurship in the UK Prospectus lays out the policy pitch across four areas: starting, scaling, staying and ‘what comes next’. Here’s what entrepreneurs welcome about the proposals – and what critics say still needs work.
Starting in the UK: lowering the first hurdles
The government argues that the UK remains a strong place to set up a business. The Treasury’s prospectus positions the UK as a top‑tier innovation economy and makes the case that the state’s role is to remove frictions so that ambition is “met with ambition”. That framing is significant. It represents a move away from a purely risk‑control mindset towards an explicit pro‑growth stance.
On the ground, founders will recognise long‑standing strengths: a mature seed and venture ecosystem, talent inflows and university spin‑outs. The call for evidence in the Treasury’s companion Tax Support for Entrepreneurs underscores that Britain’s early‑stage market is robust – but it cautions that strength at seed does not guarantee success at Series B – the second major round of venture capital financing – and beyond. By tying the prospectus to an open consultation, ministers are signalling a willingness to adjust tax levers and consider investors.
What’s welcomed: the reaffirmation of full expensing, R&D tax reliefs and the message that start‑ups are central to the UK’s “modern Industrial Strategy”. Clarity of direction helps, and the promise to streamline access to support is popular with first‑time founders.
What’s questioned: official documents stress strengths but offer fewer specifics on reducing company‑formation friction – for example, cutting admin in regulated sectors or accelerating visas for specialist hires. Founders worry that unless operational bottlenecks are tackled, the UK will keep losing momentum after the very earliest stage. The Treasury itself acknowledges a “scale‑up gap”, suggesting the start line is not the chief problem; the road ahead is.
Scaling in the UK: widening tax reliefs and talent tools
The most concrete changes are in the scaling phase. In the 2025 Autumn Budget, the government moved to expand Enterprise Management Incentives (EMI) so companies can keep using options as they grow – a longstanding ask from high‑growth firms competing for talent. It also doubled company investment limits and the gross assets test under Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs), a bid to funnel more capital into ambitious businesses.
Law firms and investors broadly welcomed the direction of travel. Commentators described the EMI changes as potentially “game‑changing” for retention, and the higher EIS/VCT limits as a timely nudge to unlock additional risk capital. For companies that outgrow the old thresholds just as they begin to break through, the reforms should reduce the cliff‑edge effect that forced a redesign of pay and investment structures mid‑scale.
What’s welcomed: bigger headroom on EMI, EIS and VCTs – and the signal that government is open to further reform following the call for evidence. Founders also like the prospectus’s emphasis on aligning public R&D with the needs of scaling businesses, and on becoming a better, faster customer via procurement – both practical levers if implemented well.
What’s criticised: complexity. Advisers warn that, even with higher limits, EIS/VCT rules remain “full of traps” that can deter participation or risk clawback if a detail is missed – a material issue for time‑poor founders. Meanwhile, the decision to reduce up‑front income tax relief for VCT investors from 30% to 20% has drawn concern that the net effect on growth‑stage capital could be blunted if policy signals pull in different directions
Staying in the UK: listings, regulation and patient capital
A recurring frustration is that British companies often scale elsewhere – relocating headquarters, raising late‑stage rounds overseas or listing on foreign exchanges. The prospectus frames “staying” as a strategic aim and ties it to capital markets reform and regulatory agility. Measures include a time‑limited exemption from stamp duty reserve tax to encourage companies to list and remain in London, and a broader push to make the UK a more attractive home for public growth companies.
A 2025 Treasury policy paper pushes for a 25% cut in administrative costs across regulators, consolidation where appropriate and a shift in culture away from excessive risk aversion...
There is also a parallel attempt to make regulation a competitive asset. A 2025 Treasury policy paper pushes for a 25% cut in administrative costs across regulators, consolidation where appropriate and a shift in culture away from excessive risk aversion – all aimed at speeding approvals and giving businesses a “clearer regulatory front door”.
What’s welcomed: a coherent “stay” narrative that links listing reforms, regulatory streamlining and procurement. Entrepreneurs consistently ask for fewer handoffs between agencies and clearer guidance, so proposals to simplify and consolidate should help – if delivered as promised.
What’s criticised: delivery risk. Cultural change in regulators is slow, and businesses have heard versions of “cutting red tape” before. Other jurisdictions are moving fast on pro‑growth regulation and capital markets competitiveness; the UK must execute quickly to avoid losing even more late‑stage champions.
An agenda with momentum – and unanswered questions
The Treasury prospectus paint a picture of a more activist, founder‑friendly state. It will champion ambition at the start, expanding fiscal levers to support scale and reshaping the system so successful companies stay rooted in Britain. The call for evidence on tax support suggests ministers are not treating 2025’s measures as the final word, but as part of an ongoing reset to address the UK’s “incubator economy” problem.
Still, entrepreneurs will judge the programme on whether it shifts outcomes at the crucial middle stages of growth. Will expanded EMI, EIS and VCTs translate into materially larger late‑stage rounds raised onshore? Will tweaks to the listings regime and stamp duty make London the obvious venue for domestic champions? And can regulators move from promising less bureaucracy to delivering materially faster, more predictable decisions?
Britain is turning the dial in the right direction – especially on talent incentives and investment limits – and this intent is broadly welcomed. The criticisms are practical rather than ideological: simplify complex reliefs, move faster on regulatory culture and ensure capital markets reforms have teeth. If the government can deliver on those fronts, the UK’s pitch to entrepreneurs will seem less like a series of promises that have been broken before.
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