UK: UK Budget 2015 And Its Impact On Entrepreneurs

Last Updated: 25 March 2015
Article by Withers LLP

The focus of this year's Budget was individuals, particularly savers. Business entrepreneurs appear to have been left largely unaffected by this year's Budget, but a number of minor changes and proposals may be of interest.

Venture capital and enterprise investment schemes

The British Business Bank is launching a pilot 'Help to Grow' programme to increase the supply of growth loans (£500,000 and £2 million) to firms. Budget 2015 announces a request for proposals to deliver the pilot, which will facilitate up to £100 million of finance for growing businesses.

The government will amend the Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), and Venture Capital Trusts (VCTs) to ensure that the UK continues to offer significant and well-targeted support for investment into small and growing companies, including:

  • requiring that companies must be less than 12 years old when receiving their first EIS or VCT investment, except where the investment will lead to a substantial change in the company's activity
  • introducing a cap on total investment received under the tax-advantaged venture capital schemes of £15 million, increasing to £20 million for knowledge-intensive companies
  • increase the employee limit for knowledge-intensive companies to 499 employees (from 249)

The government also plans to remove the requirement that 70% of the funds raised under SEIS must have been spent before EIS or VCT funding can be raised.

Business rates

The government is conducting a broad review of business rates to ensure that they are fit for purpose for a 21st century economy with a view to reporting its finding by Budget 2016.

The review will consider changes to business rates in view of trends in the use of non-domestic property and in response to concerns raised by ratepayers that the business rates system is in need of modernisation. The government's preference is for business rates to remain a tax based on property values, collected by local authorities. However, the government welcomes suggestions of alternative ways of raising local business taxes and how they could work in practice. Terms of reference were published on 16 March 2015.

Funding for Science and Innovation

In order to support science and innovation, the government plans to commit £40 million for the development of demonstrator programmes, business incubator space and a research hub to develop applications for Internet of Things technologies in healthcare and social care, and Smart Cities.

Financial Technology

Competition in banking, also described in 'Banking for the 21st Century: driving competition and choice' is to benefit from the government's approach to establishing a supportive framework for legitimate digital currency businesses and helping financial technology (FinTech) firms gain access to banking data.

To promote the UK as the world's leading FinTech hub, the government announces further support of innovation across the whole of the UK while safeguarding financial stability and consumer protection. The following initiatives are worthy of note:

  • the Financial Conduct Authority's (FCA) 'Project Innovate'1 will work with HM Treasury and the Prudential Regulation Authority (PRA) to:investigate the feasibility of developing a regulatory 'sandbox' for financial services innovators (this involves relaxing regulatory requirements while new rules are undergoing consultation); and

    • identify ways to support the adoption of new technologies to facilitate the delivery of regulatory requirements – so-called 'RegTech';
  • Innovate Finance2 has agreed to deliver its FinTech regional strategy through local partnerships - already been established in Leeds, and planned for Manchester and Edinburgh by April, and in Newcastle, Bristol and other centres before the end of the year.

Research and Development (R&D) Relief for Corporation Tax

To ensure that R&D tax credits remain effective in helping small businesses grow the government plans to implement measures to improve accessibility to R&D tax credits, including issuing new guidance aimed at smaller firms and setting out a roadmap for improvements over the next 2 years.

Entrepreneurs' Relief for Capital Gains Tax

Entrepreneur's Relief provides for a 10% capital gains tax rate on the first £10 million gains arising on the disposal of qualifying interests in trading businesses. From 18 March 2015, changes have been introduced to counter apparent use of the relief contrary to policy intention by tightening of certain conditions:

  • The "associated disposal rules" give relief where an individual disposes of personal (as opposed to business) assets in connection with his withdrawal from the business. "Withdrawal" from the business by the individual now requires a disposal of at least a 5% shareholding, or a 5% partnership share in order for an associated disposal of a personal asset to attract relief.
  • Employees with small stakes in their private equity businesses or in structures that underwent management buy-out often took advantage of the relief. The government views this as counter to policy intention, therefore shareholders in such joint venture companies will only benefit from relief on disposals where they have a significant stake and the business is a genuine trading business.
  • The application of the relief to a disposal of goodwill to a related close company, which had been perceived as being exploited for tax avoidance purposes, will also be abolished. This will restrict the ability of partnerships to access a profit stream at a lower rate of tax by restructuring as a company.

Where does that leave things?

In summary, although the 2015 Budget was no jackpot small businesses, there are a number of measures and proposals for entrepreneurs to take note of which may yet bring some benefit if they are implemented.


[1] an initiative to help start-ups and established businesses launch innovative ideas:

[2] a cross-sector, member-driven organisation that aims to accelerate the UK's leading position in global financial services by directly supporting the next era of technology-led financial services innovators, large and small, who are bringing new financial products and services to consumers':

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.