What Do Tech Startups Need To Know Ahead Of The Autumn Budget 2025

UK tech leaders are watching the Autumn Budget with a mix of hope and worry. Ben Bilsland at RSM UK said the sector depends on research and development tax relief. He explained that 99% of tech businesses sent in a claim during the past year, making the regime central to how they fund new ideas. He added that any cut in relief would strain cashflow and could push companies toward layoffs.

RSM UK’s survey found uneven experiences when dealing with HMRC. RSM UK said 32% of businesses sent in a claim that HMRC first approved and later questioned, which then ended in repayment. Another 26% faced questions from HMRC before getting approval. Bilsland said this shows the process needs to feel easier for companies or they may hesitate to file.

The Digital and Technologies Sector Plan set out a government route toward a £1 trillion valuation. It leans on artificial intelligence, quantum projects and work around cybersecurity. It also calls for cooperation between the public and private sides to strengthen infrastructure and skills. The paper from government pointed to cities such as Manchester and Bristol as growing tech hubs.

How Are Skills And Talent Bringing Concerns?

Bilsland said a growing skills gap holds back competitiveness, especially when compared to large American companies. He said the UK needs stronger teaching around artificial intelligence, quantum and Greentech. He also said the tax burden risks driving talent away from the country at a moment the sector needs to draw people in.

Immigration policy is another sticking point. Bilsland pointed to the higher salary threshold for skilled worker visas, saying skilled migration went down 10% last year and 30% when set against 2022. He warned that a cap on salary sacrifice pension schemes may weaken pay packages and make relocation to the UK less appealing.

Government material in the Digital and Technologies Sector Plan said it wants to attract global talent through tax incentives, R&D grants and backing for green innovation. But it also noted uneven access to tech growth across regions and rising strain in chip supply chains.

Bilsland said earlier speculation about capital gains tax and inheritance tax slowed dealmaking across the sector last year. He said uncertainty pushed founders and investors to wait before pressing ahead. He also said any fresh pressure in these areas would have a similar effect.

Government papers mentioned that geopolitical pressures and sustainability targets sit high on the agenda. They said AI work in health, finance and energy could push growth forward, though progress relies on keeping investment steady.

Bilsland added that the possibility of interest rate cuts may give dealmaking some lift, even if tax choices in the coming budget decide how strong that lift feels…

What Should The Tech World Prepare For?

Will Benton, Regional Vice President EMEA at Trustwave, A LevelBlue Company said: “UK businesses are facing a turbulent 2025 Autumn budget. Tax hikes dominate headlines, but there is a far bigger and more immediate economic threat that can never be overlooked: cyber resilience.

This year alone, major British businesses such as M&S and Jaguar Land Rover have been dragged into the spotlight by damaging cyberattacks. This cost them millions across the supply chain and delivered a major blow to the wider economy. It has become painfully clear that without robust cyber resilience, the UK’s economic ambitions are built on sand.

To turn the tide, three core elements are non-negotiable. First, the Government needs to increase investment into digital defence, including robust governance and guardrails. Second, the National Cyber Security Centre (NCSC) must provide sharper, more actionable guidance so UK businesses know exactly what ‘good cyber resilience’ looks like. Finally, stronger partnerships between the public and private sectors are necessary to bring regulations to fruition.

This budget is an opportunity for the Labour government to make a huge statement about the future of Britain’s cyber resilience.”

And Pedro Varela, Head of AI at Slalom commented, saying: “Ahead of the Autumn budget, the latest employment figures paint a concerning picture. The UK reached a four-year high, and much of the media is blaming AI for this decline in job opportunities. But with tax hikes as the expected focus of the budget, will the government do enough to support the future job market?

“Interestingly, the data beneath the headlines tells a more nuanced story. AI is reshaping the job market, yes. But in a way that is actually creating jobs faster than killing them.

“While the British Government has previously announced various initiatives and investment plans to explore AI’s potential, the private sector has already shifted into real action. Across industries, workforces are being transformed by upskilling or reskilling activities to meet new demands. In fact, Slalom data shows 64% of UK&I organisations are creating or planning to create new AI-related roles. It challenges the idea of AI as a pure job killer and instead points to a more complex reality: AI is driving demand for new skills and new roles across the economy. AI is not just displacing roles, but also generating new ones – particularly where organisations invest in developing the right skills.

“Yet it’s not all bells and whistles, as a new challenge is on the horizon that must be addressed at both a public and private level. One that could define whether the UK remains competitive on a global scale. In a sector evolving at breakneck speed, AI literacy has a very short-life: what is cutting edge today will be obsolete tomorrow.

“The gap between ambition and execution is widening, and without stronger collaboration between the government, educators and businesses, the UK risks becoming a dot in the wind in the worldwide race to AI.

“The Autumn Budget won’t decide the future of work on its own, but it will signal whether the UK is serious about investing in AI skills , innovation and partnerships – or content to fall behind.”

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Based on reporting by techround.co.uk.