Perhaps the biggest rumours circling about the November budget have been related to a potential wealth tax. There is a wide call for this from various MPs and in the press. However, to date, there is no consolidated Labour plan to introduce such a tax. Economically, research demonstrates it could damage growth in the UK, as it could penalise saving and cumulating capital. Alongside the abolition of non-dom tax rules, this could help drive tech investment out of the UK if wealthy individuals continue to decide to leave and invest elsewhere. It is our belief and hope that the government will not introduce a wealth tax.
The government does appear to be in favour of tax increases as opposed to spending cuts, though, so more changes to tax rates and allowances are not to be ruled out. Business Asset Disposal Relief capital gains tax rates have already been increased in previous announcements. We therefore hope that there will be no further changes here that could impact tech founders hoping to plan for their future exit.
There are calls to scrap the Digital Services Tax, the 2% levy on revenues from large multi-national digital platforms such as search engines, online marketplaces, and social media services. Whilst this might help to drive more offshore investment into the UK, it would greatly cost the government. We do not expect this tax to be scrapped; it is more likely that the government will focus on tax increases.
Tax reliefs
R&D tax relief continues to be a huge source of funding for tech businesses. In the spring statement, the government announced a consultation on R&D tax credits, and whether advance clearance could help reduce error and fraud in R&D. Responses to the consultation were due in May 2025. We hope to hear some progress in this area, particularly if this could help tech companies making legitimate claims to have tax rebates processed and paid more efficiently.
The government has already committed to increased public spending to fund R&D. We expect the scheme as a whole to remain under review. With so many big changes in recent years, we do not expect any major changes to the tax relief itself.
Elsewhere, research into the super-deduction capital allowances recently concluded. The research found that there is clear evidence that the availability of the enhanced capital allowances brought forward planned investment into the UK.
If the government is looking to increase investment incentives, then this research could support the case for enhanced capital allowances, which could be useful for tech companies that are looking to make capital purchases. It may be unlikely that any further reliefs will be announced in this budget, but we hope that this study will be used to make the case for enhanced reliefs in future.
Employee incentivisation
The government’s manifesto pledged not to raise taxes on ‘working people’, but will the Chancellor cave and increase income tax or NICs? We cannot imagine that the government would choose to increase employer NICs, which already increased in April 2025 to 15%. This increase has already hit tech sector companies, particularly those in growth phases where perhaps the margins didn’t exist.
There are some suggestions that the Chancellor may announce changes to salary sacrifice schemes, which could impact the way tech companies structure employee remuneration packages. Salary sacrifice can be popular amongst employers, particularly those who make pension contributions, but it’s also used to provide other employee benefits. Rumours suggest that there might be caps introduced, which would not be welcome news for more mature businesses with established workforces.
Further impact to employee incentivisation might come in the way share schemes are operated. A favourite among tech employers, EMI and other schemes such as CSOP already have strict criteria. The government has recently introduced a measure that will allow EMI and CSOP option agreements to be amended to include a sale on a Private Intermittent Securities and Capital Exchange System (PISCES), which has already brought in flexibility here.
The spring statement announced a series of roundtables to discuss tax advantaged share schemes, and we hope that on the back of these, the government will not tweak any scheme rules that would make them more prohibitive for tech employers.
Investment in tech
There have been recent announcements of offshore investment in the UK’s tech infrastructure. Jensen Huang, co-founder of Nvidia, has predicted that the
Meanwhile, US tech companies, including Microsoft and Google, have pledged a combined £150bn investment in the UK, which is hoped to create 7,600 jobs. Although Nick Clegg has dismissed the figure as “crumbs from the Silicon Valley table”, these investments are part of the wider UK/US “tech prosperity deal” and help the UK government demonstrate its commitment to making the UK an attractive location for founders to start and scale technology businesses.
At home, the Spending Review 2025 set out the government’s plans, which committed to putting £2bn towards AI and £160m towards the TechFirst training programme, helping to ensure that the right skills are available to deliver future technological change. It would be great to hear more about how these combined investments will be deployed in the UK and how this might impact the tech sector more widely.
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