TechUK announce their Scale-Up Action Plan

Will Fintech be helped or hindered by the Government?

Alex Speedie

March 25, 2025

As the UK government prepares to unveil its industrial strategy, TechUK has published an action plan aimed at enabling technology firms to scale successfully within the UK. The recommendations come amid mounting concerns over the country’s attractiveness as a hub for high-growth tech businesses, particularly in light of decisions by fintech firms such as Revolut, which has indicated it would not list in London, and Klarna, which has opted to relocate its headquarters to New York.

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TechUK’s proposals include:

Establishing a dedicated support package for tech scale-ups under the Department for Science, Innovation and Technology, including a concierge service.
Enhancing the newly formed Regulatory Innovation Office, leveraging regulatory sandboxes and test beds to foster innovation.
Streamlining government financial support across UKRI, Innovate UK, and the British Business Bank to improve access for scale-ups.
Strengthening the UK’s Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCTs), including extending age limits for firms to enhance regional tech growth.
Accelerating broader capital market reforms to maximise the impact of government-backed investment vehicles.
Drawing on France’s Tibi scheme to encourage investment in innovative UK tech businesses.
Raising awareness of the Enterprise Management Incentive (EMI) scheme as a tool for scale-ups to attract talent.
Making the scale-up worker visa more competitive by reducing complexity and cost.
Leveraging national assets such as universities to develop a robust pipeline of entrepreneurial talent.
Establishing a network of diverse next-generation tech leaders.

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The UK has traditionally been a strong environment for both start-ups and scale-ups, aided by tax incentives such as the Seed Enterprise Investment Scheme (SEIS) and EIS, which have made early-stage investment particularly attractive. A well-established community of angel investors and venture capitalists has historically provided not only funding but also valuable networks and mentorship.

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However, recent tax changes have prompted a flight of high-net-worth individuals, eroding the early-stage funding ecosystem. Data from Datacity suggests a slowdown in new fintech incorporations, raising concerns that early-stage entrepreneurs are looking to alternative hubs such as Dubai.

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The UK has also been a leading destination for scale-ups, supported by a deep capital market and attractive exit opportunities via the London Stock Exchange (LSE) and AIM. Entrepreneurs’ relief previously mitigated high tax burdens on exits, reinforcing the UK’s appeal. However, a combination of Brexit-induced capital market contraction, the introduction of share transaction taxes in Europe (but not in New York), and a scaling back of entrepreneurs’ relief has significantly reduced the UK’s attractiveness.

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Without addressing these structural issues, there is a risk that high-growth firms will increasingly incorporate strategies to redomicile at the point of becoming highly profitable, shifting value creation to more favourable jurisdictions.

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The UK’s fintech sector, whilst still pre-eminent, now faces growing competitive pressures. While initiatives such as PISCES aim to restore the UK’s investment appeal, fundamental policy adjustments will be necessary to prevent a long-term decline, therefore TechUK’s call for reform is timely. With that, the question remains - will the government heed the warning and take decisive action to ensure the Fintech industry continues to flourish in the way it has done?

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TechUK announce their Scale-Up Action Plan

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