Beneath the headlines in the Chancellor’s Budget statement today, there was some encouraging news for the FinTech world.
There was an update on the Open Banking project. From early next year, the project will make it easier for customers to access innovative products and services that better suit their needs. The government announced today that it’s secured the commitment of the largest banks to extend Open Banking to more payment products, including credit cards.
There’ll be a £2.5 million award through the second phase of the Nesta Open-Up Challenge for firms willing to develop innovative Open Banking apps. This will provide greater customer choice and flexible support for challenger banks.
The removal of Stamp Duty for first-time buyers up to a property value of £300,000 stole the headlines today, but of greater interest to the Fintech market was the announcement of a £2 million competition to support FinTech firms looking to develop solutions for first-time buyers.
Mortgage lenders and credit reference agencies are often unable to take rental payment history into account as they don’t have access to the data. First-time buyers are often let down in their mortgage applications because their rental history isn’t consistently taken into account. The competition will support firms to solve this problem.
Tech Nation – To secure the UK’s world-leading position in digital innovation, the government will invest £21 million over the next 4 years to expand Tech City UK’s reach – to become ‘Tech Nation’ – and support regional tech companies and start-ups to fulfil their potential. Tech Nation will roll out a dedicated sector programme for leading UK tech specialisms, including AI and FinTech. Regional hubs will be located in: Cambridge, Bristol and Bath, Manchester, Newcastle, Leeds and Sheffield, Reading, Birmingham, Edinburgh and Glasgow, Belfast and Cardiff.
It was announced that there’ll be more support to help businesses get the finance they need. The British Business Bank’s Enterprise Finance Guarantee Scheme has been extended until March 2022, and the programme has been expanded to support up to £500 million of loans per year.
The Government is very keen to encourage companies to increase the amount of Research and Development they carry out as they see this as increasing productivity and promoting growth.
In order to incentivise companies to do this, with effect from 1 January 2018 the rate of the R&D expenditure credit will increase from 11% to 12%.
From 6 April 2018, individuals investing in knowledge-intensive companies via EIS and VCT will have their limit doubled to £2m, and the companies themselves will be able to receive up to £10m in funding through EIS and VCT.