Budget 2025: Support for scale-ups but tech is left off

The Autumn Budget failed to mention specific sectors

Labour’s second Budget included little mention of technology, but several measures that will affect UK businesses.

Chancellor Rachel Reeves was pipped to the post by the Office of Budget Responsibility (OBR), which accidentally released the details of her speech about an hour before it actually took place.

Sadly, there was little about the tech sector specifically.

We already knew about plans to open two new AI Growth Zones in Wales, and while there were some references to supporting the British AI landscape there was no information on how the government would achieve that.

There will be funding to make apprenticeships for under-25s completely free for SMEs – which represent more than 90% of British firms. This builds on the youth guarantee scheme announced in last year’s Budget, which promised every 18 to 21-year-old in England access to an apprenticeship, training, education opportunities or help to find a job.

Reeves also lifted the eligibility limits of the Enterprise Management Incentive (EMI) scheme. This gives certain small to medium-size UK companies a way to offer employees the right to buy (in the future) shares in the company at a fixed price without paying income tax or National Insurance.

Previously, EMI was limited to companies with gross assets of £30 million and under 250 employees. Those limits have been raised to £120 million and 500 employees, and the options that can be sold has been raised from £3 million to £6 million.

That measure allows companies in the scale-up phase, as well as startups, to benefit from EMI, which will help them attract and retain talent.

In healthcare, Reeves talked about a commitment to provide £300m in technology to improve patient care in the NHS. The money is aimed at making it easier for patients to access digital health records and automating administrative tasks.

Labour is also changing the write-down allowance rate – which businesses use to deduct the cost of assets gradually over time – from 18% to 14% per year. At the same time the government is introducing a 40% First-Year Allowance (FYA), so businesses can deduct 40% of the cost of certain assets in the year they’re bought, rather than spreading it over many years.

Everyone is asked to contribute

For individuals, the news was not so good. Reeves extended the freeze on income tax thresholds, which then-Chancellor Rishi Sunak introduced in 2021, by a further three years, now ending in 2031. She acknowledged that this would not be a popular move, but asked “everyone to make a contribution” to the economy.

She is also introducing a £2,000 cap on the ability to sacrifice pay into a pension scheme tax-free.

Like the USA, the UK government also plans to introduce customs duties on parcels “of any value,” which will directly affect low-cost imports from companies like Shein and Temu. However, the change will be introduced gradually to 2029.