UK 2025 Budget sparks debate over innovation, tax & AI policy

The UK's 2025 Budget has drawn a mix of opinions from business leaders in the technology and fintech sectors, with commentary focused on the support for start-ups, investment in innovation, and ongoing concerns regarding the tax burden faced by companies. While several measures have been welcomed for their potential to foster entrepreneurship and investor confidence, questions remain around the effectiveness of broader support for growing businesses and the practical challenges of adopting new technologies.

Entrepreneurial support

James Neville, Chief Executive of Yaspa, said, "Today's Budget sends a clear and important message to the UK's entrepreneurs like myself. The government is signalling loud and clear that if you build here, Britain will back you."

"As a British‐founded business, Yaspa welcomes this commitment and is proud to be part of a community that drives innovation, creates jobs, and grows the economy."

"We are excited to continue to grow and expand, and we look forward to engaging actively in the discussions the government has launched. Support like this will help unlock long‐term investment, give UK start‐ups the chance to scale, and ensure businesses like ours can hire, innovate, and invest in the future of Britain," said Neville.

Investor incentives

Russ Shaw CBE, founder of Tech London Advocates and Global Tech Advocates, commented, "This Budget was rightly focused on cost-of-living pressures and stabilising the wider economy. While the primary emphasis was on these immediate challenges, there are a few notable measures that will help support entrepreneurs and scaling businesses."

"The three-year Stamp Duty Reserve Tax (SDRT) exemption for UK listings, along with targeted regional initiatives such as the South Wales semiconductor cluster and AI Growth Zones, signal support for sectors central to the UK's innovation economy. In addition, increases to EMI and VCT/EIS limits, and higher thresholds for Knowledge Intensive Companies, will make it easier for investors to provide follow-on capital, helping ambitious businesses grow domestically.

"The Budget also includes steps to strengthen the wider innovation ecosystem. Entrepreneurship fellowships in universities will support commercialisation across the UK and build on existing UKRI investments, while the British Business Bank's initiatives - including VentureLink and its five-year strategic plan to increase capital deployment - will help attract institutional investment into UK scaleups and improve access to growth capital."

"The government's Call for Evidence on tax support for entrepreneurs is a positive step in engaging with the scaleup community, which could inform future policy to make it easier for ambitious companies to start, scale, and stay in the UK."

The focus now should be on delivering these measures and creating a more stable, growth-oriented environment for business. Entrepreneurs and scaling firms will look for consistency and clarity to make long-term decisions, and success will depend on turning these announcements into tangible support that helps the UK's innovation economy thrive," said Shaw.

Concerns on tax

Greg Hanson, Group Vice President and Head of EMEA North at Informatica, said, "The fiscal drag presented by the budget, still leaves a heavy tax burden on UK businesses. With corporation tax still at 25%, there are simply less profits to invest in innovation projects that will drive future growth."

"Companies with planned agentic AI projects for 2026, now face the dual jeopardy of finding the funding and navigating successfully out of pilot stage. Too many organisations are still faltering at the pilot stage, finding they have inconsistent datasets riddled with gaps, biases and contradictions. And, until that data is clean, connected and governed, agentic AI simply can't perform," said Hanson.

AI and digital adoption

Stuart Miller, Director of Public Policy and Tech Research at Xero, said, "It's reassuring to see the government looking to lead from the front and use technology to improve public services. This sends a clear signal that innovation remains high on the agenda. Yet there was only a mere nod to AI, leaving us with a significant opportunity to go further.

"Industries like accounting are already reaping the benefits of emerging technologies. We know from our own research that 98% of accounting firms have adopted AI in some form, with nearly half (46%) experiencing productivity gains which have contributed an additional £1 billion to UK GDP.

"We now need to ensure that these benefits are shared in a way that is safe and fair for all, particularly small businesses who are hesitant about fully embracing AI due to concerns around data privacy (37%), fears of job displacement (35%), and uncertainty about accuracy and reliability (30%).

"Meaningful, joined-up policies from the heart of government that use combined levers, such as regulation, incentives, advice and skills, would go a long way in supporting the broader adoption of powerful digital tools so the entire economy can thrive," said Miller.