Unveiling the second Budget of this government, Chancellor Rachel Reeves has announced further tax rises on businesses with limited support, and growth-driving measures offered in return.
It was 12 months ago that the Chancellor significantly raised business costs through a series of tax rises including raising employer national insurance contributions (NICs). This was supposed to be a one-off occurrence to restore the public finances, but a year on and it is businesses that once again find themselves caught in the middle of a difficult Budget.
That being said, there is some positive news for some tech companies in the sector, mainly investment-focused early stage and fast-growing organisations.
Below, we have gathered the most significant announcements made today.
Starting, scaling, staying
For entrepreneurs, start-ups and scale-ups there were a range of announcements including:
The Enterprise Management Investment Scheme: The government will increase company eligibility limits for Enterprise Management Incentives (EMI) to allow scale-ups to join start-ups in offering tax-advantaged shares.
The Venture Capital Trust Scheme: There will be a reduction to the upfront Venture Capital Trust Scheme (VCT) from 30% to 20%.
Tax support for entrepreneurs: A call for evidence has been launched on how the tax scheme can better back entrepreneurs and the impact of existing schemes.
Stamp Duty relief for new UK listings: New London Stock Exchange Listings will see a 3-year exemption on stamp duty.
Taxes on dividends, property and savings income: There will be an increase to the tax rates on dividends, property and savings income by 2%, increasing the basic and higher rates to 10.75% and 35.75% respectively.
Capital Gains Tax: From November 2025, Capital Gains Tax relief on disposals to Employee Ownership Trusts (EOTs) will reduce from 100% to 50%.
ISAs: Reforms will be introduced to the ISA system, keeping the £20,000 annual ISA allowance but £8000 will be designated exclusively for stocks and share ISAs. Over 65s will, however, be able to retain the full cash allowance.
Public finance: The British Business Bank will invest at least £5 billion in growth-stage funds.
Hiring and workforce
In terms of attracting talent and retaining employees, the Chancellor announced:
National Living Wage and National Minimum Wage: National Living Wage and National Minimum Wage are set to increase above inflation rates. For over 21s (also NLW) it will increase by 4.1%, for 18-20-year olds it will increase by 8.5%, and it will grow by 6% for 16-17-year olds.
Employer National Insurance contributions: The employer National Insurance freeze will be extended for an additional three years, running from 2028/29 until 2030/31. This follows the earlier reduction of the threshold from 9,100 to 5,000 in the 2024 Autumn Budget.
Salary sacrificed pensions: Tax free salary-sacrificed pensions will be capped at £2,000 per year after which national insurance contributions will be applied treating them like ordinary employee pension contributions.
Investment into supporting employment and skills: Over the next three years, £820 million will be invested as part of the Youth Guarantee: Jobs Guarantee scheme to guarantee six-month paid work placements for 18-21 year olds who have been on Universal Credit and those who have been looking for at least 18 months. There will also be a £725 million investment for the Growth and Skills Levy which will support apprenticeships for young people and include a charge creating free apprenticeship trainings for under-25s for SMEs.
Higher education income levy from international students: A new levy on higher education income from international students will be introduced from the 2028/29 academic year, set at £925 per international student per year. The first 220 international students at each institution will be exempt, with the levy applying only beyond this threshold.
Infrastructure and business rates
Business Rates: The government have confirmed they will move forward with plans to reduce rates on retail, hospitality and leisure businesses through increases to the rates for properties with a rateable value of over £500,000, making the high-value multiplier 50.8p in 2026-27. The government are also publishing a Call for Evidence on how Business Rates affect investment.
Transitional relief for business rates: As part of these plans, the Chancellor announced that there will be a Transitional Relief scheme for ratepayers facing large bill increases in 2026, with a maximum 30% relief for properties with a rateable value of over £100,000.
Planning funding: Funding of £48 million has been announced for MHCLG, DSIT and Defra over the next three years to boost capacity and capability in the planning system, including by reaching 1,400 recruitments across the planning system by the end of the current Parliament by expanding the Pathways to Planning Graduate Scheme and creating a new Planning Careers Hub to retain and retrain mid-career professionals. There are also plans to work with the judiciary to make further reforms to ensure planning cases are heard more quickly and by expert judges.
Grid connections: The Budget documentation announced that efforts would be made to prioritise grid connection for projects that require it. This will involve DSIT publishing a strategic plan for data centres in order to prioritise projects are taken forward. Government will also work with Ofgem to explore enhanced entry and membership requirements to ensure viable planning projects progress in the demand queue.
Gigabit connection: The Budget included long-announced plans from DSIT that they will be consulting on measures to create a new right for leaseholders to request a gigabit broadband connection and a duty for freeholders not to unreasonably refuse such a request.
Energy reform: As with the announcement of the British Industrial Competitiveness Scheme consultation on Monday, there is no energy support for digital infrastructure. However, a combination of the Energy Company Obligation scheme levy being repealed and 75% of the domestic costs of the Renewables Obligation being moved to general taxation will, until 2028/29 at least, will save households an estimated £150 on bills.
Nuclear eligibility for green financing: The government has published an updated Green Financing Framework alongside the Budget which has added nuclear energy to the list of eligible expenditure for green financing.
Nuclear policy going forward: The government has endorsed the recent Fingleton Report on the nuclear regulatory regime. The government will also legislate to give the Office of Nuclear Regulation the ability to consider overall strategic factors such as energy and national security imperatives in the delivery of its statutory purposes and there is a strategic steer from the Prime Minister which sets expectations for the civil, defence, and decommissioning nuclear sectors to accelerate safe and efficient delivery through proportionate regulation and stronger collaboration
Critical Minerals: In addition to the previously announced reopening of the South Crofty tin mine in Cornwall, the Budget committed to a £30 million fund for Cornwall to include investment in critical minerals.
Other things to note…
E-invoicing and HMRC: The government have declared their ambition for VAT to be fully digital from 2029, with a roadmap to be published in 2026 to get there. This will also include support from government and Ofcom to help businesses access and adopt a gigabit connection.
HMRC digitisation: The Budget also included an investment of £59 million in new technology over the next five years to provide taxpayers with real-time digital prompts for VAT filing software from April 2027, and Corporation Tax filing software from April 2028. There is also a broad aim for 90% of HMRC interactions with customers to be digital by 2030.
NHS digitisation: An additional £300 million of capital investment for NHS technology was announced to support NHS investment in digital technology, including through increased investment in digital health records.
Digital ID: The government has announced that the implementation of digital ID cards is set to cost £1.8 billion (£1.3 billion CDEL & £0.5 billion RDEL) over the next three years. The government claims to meet the costs through current Department Expenditure Limits budgets however specific funding has yet to be outlined.
Electric Vehicles Tax: There will be a new mileage-based charge on battery electric and plug-in hybrid cars from April 2028, raising £1.4 billion, alongside 100% relief for eligible electric vehicle charging points and electric vehicle only forecourts. A consultation on these measures was announced.
Ride-sharing taxi app VAT rise: The government have announced they will reform VAT to prevent ride-sharing apps paying a lower rate of VAT than others.
Customs on Low Value Imports: Government will remove the Customs Duty Relief on goods imported into the UK valued up to and below £135 by March 2029. There will be a consultation on new customs arrangements.
Verdict
This was always going to be a challenging Budget for the Chancellor to pull off and whilst it is piecemeal, containing a raft of measures for businesses to navigate, the commitment to maintaining pledges made in the Spending Review is a welcome step towards economic stability.
Whilst there are some positives included – such as reforms to the Enterprise Management Incentives scheme in an effort to bring scale-ups in line with start-ups in offering tax-advantaged shares – the benefits are likely to be felt only by a narrow portion of the technology sector, namely those in high-growth and investment-focused early stages. For other businesses across the sector, they can expect costs to be raised once again.
A threshold freeze for a further three years on National Insurance Contributions (NICs) from employers was announced, which alongside wage increases is likely to see organisations face higher NICs over the coming years. Additionally, the Government confirmed they will move forward with plans to reduce rates on retail, hospitality and leisure businesses through increases to rates for other premises with a ratable value over £500,000 – which will likely significantly affect digital infrastructure.
In terms of the measures the OBR forecasts “expect quarterly growth to pick up only gradually in the near term…as domestic business and consumer confidence remains subdued, including in anticipation of further tax rises” suggesting this Budget does little in pursuit of the Government’s “national mission” of wider economic growth. Targeted support for the Industrial Strategy sectors is welcome but is not as extensive as we would have hoped.
Finally, the Chancellor stressed the increased headroom that this Budget builds back into the public finances – now forecast to be £21.7bn – but global events and economic headwinds beyond the Chancellor’s control remain a significant risk to the Government’s future fiscal plans and there is the expectation that they must deliver on these spending commitments.
This Budget was always going to be a difficult one for business. The Chancellor has delivered some of our key asks to support investment for fast-scaling companies, including raising thresholds around enterprise management incentives and investing £5 billion in growth-stage funds.
However, personal tax changes mean that the costs and complexities of employing people in the UK are continuing to increase while changes to business rates and a failure to address sky-high energy costs are putting more cost on digital infrastructure. Although there are some positives, ultimately this Budget does not deliver the boost to growth that the sector and the wider economy needs.
Antony Walker
Deputy CEO, techUK
Read techUK’s overarching response to this year’s Budget and what it means for the digital economy.
We would also like to encourage members to attend our members-only webinar after the budget on Friday 28 November, where our expert panel will outline what the budget means for the tech sector and for the government. You can find out more here.
If you have any questions, please contact the Digital Economy team.
Edward Emerson
Head of Digital Economy, techUK
Edward Emerson
Head of Digital Economy, techUK
Edward leads the Digital Economy programme at techUK, which includes our work on online safety, fraud, and regulation for growth initiatives.
He has prior experience working for the Department for Digital, Culture, Media and Sport and has previously worked for a number of public affairs consultancies specialising in research and strategy, working with leading clients in the technology and financial services sectors.
Archie Breare joined techUK in September 2022 as the Telecoms Programme intern, and moved into the Policy and Public Affairs team in February 2023.
Before starting at techUK, Archie was a student at the University of Cambridge, completing an undergraduate degree in History and a master's degree in Modern British History.
In his spare time, he likes to read, discuss current affairs, and to try and persuade himself to cycle more.
techUK's Policy and Public Affairs Programme activities
techUK helps our members understand, engage and influence the development of digital and tech policy in the UK and beyond. We support our members to understand some of the most complex and thorny policy questions that confront our sector. Visit the programme page here.
techUK Webinar: Budget Debrief
Join techUK for this members-only webinar on Friday 28 November, where we will analyse what the Goverment's 2025 Budget means for tech.
Our members develop strong networks, build meaningful partnerships and grow their businesses as we all work together to create a thriving environment where industry, government and stakeholders come together to realise the positive outcomes tech can deliver.
Antony Walker is deputy CEO of techUK, which he played a lead role in launching in November 2013.
Antony is a member of the senior leadership team and has overall responsibility for techUK’s policy work. Prior to his appointment in July 2012 Antony was chief executive of the Broadband Stakeholder Group (BSG), the UK’s independent advisory group on broadband policy. Antony was closely involved in the development of broadband policy development in the UK since the BSG was established in 2001 and authored several major reports to government. He also led the development of the UK’s world leading Open Internet Code of Practice that addresses the issue of net neutrality in the UK. Prior to setting up the BSG, Antony spent six years working in Brussels for the American Chamber of Commerce following and writing about telecoms issues and as a consultant working on EU social affairs and environmental issues. Antony is a graduate of Aberdeen University and KU Leuven and is also a Policy Fellow Alumni of the Centre for Science and Policy at Cambridge University.
As Head of Public Affairs, Alice supports techUK’s strategic engagement with Westminster, Whitehall and beyond. She regularly works to engage with ministers, members of the UK’s parliaments and senior civil servants on techUK’s work advocating for the role of technology in the UK’s economy as well as wider society.
Alice joined techUK in 2022. She has experience working at both a political monitoring company, leading on the tech, media and telecoms portfolio there, and also as an account manager in a Westminster-based public affairs agency. She has a degree from the University of Sheffield in Politics and Philosophy.
Edward leads the Digital Economy programme at techUK, which includes our work on online safety, fraud, and regulation for growth initiatives.
He has prior experience working for the Department for Digital, Culture, Media and Sport and has previously worked for a number of public affairs consultancies specialising in research and strategy, working with leading clients in the technology and financial services sectors.
Nimmi Patel is the Associate Director of Policy at techUK. She works on all things skills, education, and future of work policy, focusing on upskilling and retraining. Nimmi is also an Advisory Board member of the Digital Futures at Work Research Centre (digit). The Centre’s research aims to increase understanding of how digital technologies are changing work and the implications for employers, workers, job seekers, and governments.
Prior to joining the techUK team, she worked for the UK Labour Party and New Zealand Labour Party, and holds an MA in Strategic Communications at King’s College London and BA in Politics, Philosophy and Economics from the University of Manchester. She also took part in the 2024-25 University of Bath Institute for Policy Research Policy Fellowship Programme and is the Education and Skills Policy Co-lead for Labour in Communications.
Samiah Anderson is the Head of Digital Regulation at techUK.
With over seven years of Government Affairs expertise, Samiah has built a solid reputation as a tech policy specialist, engaging regularly with UK Government Ministers, senior civil servants and UK Parliamentarians.
Before joining techUK, Samiah led several public affairs functions for international tech firms and coalitions at Burson Global (formerly Hill & Knowlton), delivering CEO-level strategic counsel on political, legislative, and regulatory issues in the UK, EU, US, China, India, and Japan. She is adept at mobilising multinational companies and industry associations, focusing on cross-cutting digital regulatory issues such as competition, artificial intelligence, and more.
She holds a BA (Hons) in Politics, Philosophy, and Economics from the University of London, where she founded the New School Economics Society, the Goldsmiths University chapter of Rethinking Economics.
Audre joined techUK in July 2023 as a Policy Manager for Data. Previously, she was a Policy Advisor in the Civil Service, where she worked on the Digital Markets, Competition and Consumers Bill at the Department for Science, Innovation and Technology, and at HM Treasury on designing COVID-19 support schemes and delivering the Financial Services and Markets Bill. Before that, Audre worked at a public relations consultancy, advising public and private sector clients on their communications, public relations, and government affairs strategy.
Prior to this, Audre completed an MSc in Public Policy at the Korea Development Institute and a Bachelor's in International Relations and History from SOAS, University of London. Outside of work, she enjoys spending time outdoors, learning about new cultures through travel and food, and going on adventures.
Archie Breare joined techUK in September 2022 as the Telecoms Programme intern, and moved into the Policy and Public Affairs team in February 2023.
Before starting at techUK, Archie was a student at the University of Cambridge, completing an undergraduate degree in History and a master's degree in Modern British History.
In his spare time, he likes to read, discuss current affairs, and to try and persuade himself to cycle more.
Dani joined techUK in February 2025 as a Policy Manager in the Digital Regulation team.
Prior to this, Dani worked in political monitoring where she was a consultant for Digital, Culture, Media and Sport. In this role, she developed a strong understanding of parliamentary procedure, closely following all of the major developments in the tech centre and working with several key stakeholders and regulators.
She has an undergraduate degree in History from the University of Bristol and an MPhil in Modern European History from the University of Cambridge.
Outside of tech, Dani has a strong interest in addiction policy, particularly towards drugs, having written her dissertation on the topic as well as several subsequent research projects. In her spare time, she enjoys cooking and following all things motoring, whether that be F1, MotoGP or Formula E.
Oliver is a Junior Policy Manager at techUK, working across Public Affairs and Digital Regulation policy. He supports the organisation’s engagement with government and parliament, contributes to shaping techUK’s regulatory agenda, and plays a key role in coordinating political outreach, policy projects, and flagship events.
He joined techUK in November 2023 as a Team Assistant to the Policy and Public Affairs team, before stepping into his current role. He has been closely involved in efforts to ensure the tech sector’s voice is heard in the policymaking process.
Oliver holds a Master’s in Policy Research from the University of Bristol and a BSc in Policy from Swansea University. During his studies, he contributed to mental health research as a Student Research Assistant for the SMaRteN network.
Outside of work, Oliver is a keen debater and remains active in the UK debating community, having previously led the Swansea University Debating Union. He enjoys exploring complex issues from multiple perspectives and values clear, thoughtful communication in policy discussions.
Tess joined techUK as an Policy and Public Affairs Team Assistant in November of 2024. In this role, she supports areas such as administration, member communications and media content.
Before joining the Team, she gained experience working as an Intern in both campaign support for MPs and Councilors during the 2024 Local and General Election, and working for the Casimir Pulaski Foundation on defence and international secuirty. She has worked for multiple charities, on issues such as the climate crisis, educational inequality and Violence Against Women and Girls (VAWG). In 2023, Tess obtained her Bachelors of Arts in Politics and International Relations from the University of Nottingham.
