Tech Industries Call for More Government Support
News release
23rd July 2013
UK technology businesses are calling for the Government to make more money available to boost the sector.
A survey of over 2,000 technology businesses revealed a common perception that raising finance is difficult in the current economic climate.
Many firms which responded to the survey called for the Government to inject more money, either by setting up a ‘Dragons Den’ fund or by mandating banks to lend to pre-revenue companies and start-ups.
But at the same time almost half of businesses surveyed said they had raised finance in the past year.
The survey, conducted by accountants and business advisers Duncan & Toplis and the Kreston International network of accountancy firms, shows a sector buoyed by its strengths in the development and commercialisation of technology but operating in uncertain times.
This year the annual survey focused on the views of contributors on state assistance and how they were finding the economy.
Mike Brown, Tax Director at Duncan & Toplis, said: “Many technology businesses are calling for the Government to make more money available, with one respondent suggesting it set up a £2 billion Bank of England ‘Dragons Den’ fund. Another suggested that the Government should consider mandating banks to lend to pre-revenue companies.
“Businesses feel that there are obstacles to raising equity finance and generating revenues,” Mike added. “However, some 43 per cent of respondents raised money within the last year, with 35 per cent raising £1m or more. A high percentage of respondents also plan to raise over £1m within the coming 12 months.
“These aspirations contradict the overall belief that the recession has severely impacted the ability to raise money.”
Respondents commented on the need for more money to be made available to earlier stage companies. Over half of the people surveyed turn to business angels and a third rely on family and friends.
“The most popular sources of funding for technology companies are grants followed by business angels. Many grants are match-funded, meaning that they are only awarded when other funds have already been raised, so they don’t necessarily represent an alternative source of funding.
“A high proportion of respondents have benefited from grants but despite their apparent popularity, replies suggest that the application process can be off-putting.
“Far and away the most popular Government initiative has been that of R&D tax credits. However, there appears to be a downward trend in those accessing UK’s state aid compared to last year. There was also a strong thread in the replies calling for a reduction in red tape and legislative burden.”
Mike concluded: “Many of the themes drawn out in the survey are consistent year on year but of particular note this time were the numbers of respondents who appear unaware of key Government initiatives, such as Patent Box.
“This strongly suggests that before other measures are introduced, the Government should publicise more effectively the opportunities it offers businesses within the sector.”
Copies of the Kreston Technology Survey 2012 are available at http://www.duntop.co.uk/publications/Kreston%20Technology%20Survey%20Report.pdf
or by emailing hannah.clark@duntop.co.uk.
About Duncan & Toplis
- Duncan & Toplis was established in 1925 and has since grown into one of the largest independent firms of chartered accountants in the Midlands.
- Duncan & Toplis appears in the top 30 UK accountancy practices list published by Accountancy magazine.
- The company has 10 offices throughout the East Midlands: in Grantham, Boston, Lincoln, Louth, Melton Mowbray,Newark, Skegness, Sleaford, Spalding and Stamford.
- Duncan & Toplis offers a wide range of services to small to large-sized family businesses, from accountancy, audit and tax to payroll, human resources and computer services.
- The business employs around 300 staff, of whom 85 are currently engaged in professional training.
About Kreston International Limited
- Kreston International is a global network of accounting firms, each of which is a separate and independent entity and as such has no liability for the acts or omissions of any member firms.
- Currently ranking as the 13th largest in the world, Kreston now covers 98 countries with 600 offices providing a resource of over 19,000 professional and support staff and generating aggregate fee revenues of US$1.8bn.
- For further information visit www.kreston.com
Jez Ashberry
Shooting Star PR
01522 528540
jez@shootingstar-pr.co.uk
www.shootingstar-pr.co.uk
t: @jezashberry
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