COVID-19: UK tech’s response to latest Government measures
Comment from Gerard Grech, Chief Executive, Tech Nation
“This will be the most high-tech response to a pandemic in human history. UK tech will have a key role to play globally, with the potential to save lives and to connect people in ways we may never have expected.”
Reaction to self-employment measures announced 26/03:
“Of the 2.93 million tech sector workers in the UK, the self-employed are a key part of the tech ecosystem. Being able to tap into freelance user experience design or software programmer talent, for example, enables the continued growth of the industry. The new Self Employed Income Support Scheme announced by the Government today will therefore be welcomed by the tech sector’s self-employed workforce, with a taxable grant worth 80% of average profits over the past three years, up to £2,500 per month, and according to the Treasury, benefitting 95% of the UK’s self employed.”
Reaction to financial support measures from over 100 tech CEOs and founders, surveyed by Tech Nation:
The Coronavirus Business Interruption Loan Scheme (CBILS) and job retention schemes are proving necessary for businesses - 57% of companies surveyed plan to access CBILS, and 78% of companies surveyed plan to access the job retention scheme.
Looking at this in more detail however - 58% of startups do not intend to access either scheme, compared to 72% of scaleups intending to access either or both of the schemes, showing a variation of approach between differently sized companies. (A scaleup is categorised as a tech company with 10 or more employees and 20% year on year growth.)
The CBILS scheme will not meet a key section of urgent need in the tech sector. Tech companies are finding that not yet being profitable or lacking assets to provide suitable security is restricting access to government schemes. In addition, venture capital backing may restrict the option to take on debt finance.
Tech Nation policy recommendations, Gerard Grech comments: “My five key policy suggestions for supporting the UK tech sector are:
Liquidity to pre-revenue early stage startups - funds to support innovative tech startups that are pre-profit to carry them over the next 3-6+ months. Convertible loans invested by the Government could be made into over 1000 companies across the UK.
Co-working spaces for tech companies and self-employed - some co-working spaces fail to qualify for small business rate relief - these could be temporarily reclassified as hospitality. Small scale startups operating large spaces don’t qualify for rate relief at present because of the land area of the business, so this change would provide useful temporary relief for co-working spaces across the country.
Talent - 38% of companies were concerned about staff retention due to cash flow. A NI/PAYE deferral could be introduced to enable companies to manage cash flow and staff.
Visas - Tier 2 Visas holders who are let go could have their visas extended for 18 months regardless of employment status.
Research & Development - AI companies working on breakthrough tech need funding. Accelerating R&D tax credits could help credit availability.”
