Journey

Grow your tech business

Scale your tech business - funding, international expansion, investment, and preparing for exit

Technology & Digital Growing & Scaling Updated 15 September 2026

8 milestones references 23 guides

Assessing scale-up readiness
Before scaling, ensure your foundations are solid. Strong unit economics, proven product-market fit, and robust systems are prerequisites for sustainable growth.
Growth triggers and compliance obligations

As you scale, you'll hit regulatory thresholds that trigger new obligations - company size thresholds affect audit requirements, employee counts trigger pension duties, and revenue thresholds affect VAT and Digital Services Tax.
Company size determines your reporting obligations to Companies House. Thresholds increased from 6 April 2025:

Micro-entity

Turnover <= GBP 1m, Balance sheet <= GBP 500k, Employees <= 10

Small company

Turnover <= GBP 15m, Balance sheet <= GBP 7.5m, Employees <= 50

Medium company

Turnover <= GBP 54m, Balance sheet <= GBP 27m, Employees <= 250

Large company

Exceeds medium thresholds

Impact of size classification:

Micro/small companies can file abbreviated accounts

Small companies exempt from statutory audit

Medium companies must file full accounts but can claim medium exemptions

Large companies require full audit and enhanced reporting

Must meet two of the three criteria to qualify for a size band. Size is tested over two consecutive years.

Filing company accounts (opens in a new tab)
Understand scaling thresholds

Know which employee and revenue thresholds trigger new legal obligations as you grow.

Requirement · Tech scale-ups: Cyber Essentials for government contracts

From June 2014, Cyber Essentials certification has been mandatory for government contracts involving personal data or certain ICT services. Many enterprise clients now require it. Certification costs from around GBP 300 for self-assessment, GBP 1,500+ for Plus level with external testing.

Applies to: Tech companies bidding for government contracts or enterprise clients
Official guidance (opens in a new tab)

Get Cyber Essentials certified

Baseline cyber security certification increasingly required for enterprise and government clients.
Funding your growth
Tech businesses have multiple funding routes: R&D tax credits recoup development costs, government grants fund innovation, and equity investment from angels and VCs provides growth capital.

R&D tax credits for tech companies

Most tech companies developing innovative software qualify for R&D; tax relief. Claim via your CT600 return - loss-making startups can receive cash payments. The merged scheme offers up to 20% relief on qualifying expenditure.

Merged scheme rate

20% above-the-line credit (15% after 25% Corporation Tax)

R&D intensive SMEs (ERIS)

27% tax credit for loss-making SMEs spending 30%+ on R&D

SME definition

Under 500 employees and turnover below €100m

Applies from

Accounting periods starting on or after 1 April 2024

R&D tax relief (opens in a new tab)

R&D Tax Credits - maximise your claim

Tech companies can claim R&D tax credits for innovative software development, algorithm improvement, and technical problem-solving. Qualifying costs include developer salaries, subcontractor costs, cloud computing, and software licences used in R&D. Claims are made via CT600 returns - use a specialist to maximise claims.
Official guidance (opens in a new tab)

gov.uk
Claim R&D tax credits (opens in a new tab)

Tech businesses can reclaim significant costs on qualifying R&D. Consult an R&D specialist accountant.
Government-backed loans for growth

The Growth Guarantee Scheme provides government-backed loans up to GBP 2 million for growing businesses. Available through participating banks with the government guaranteeing 70% of the loan.
Facility size

GBP 1,000 to GBP 2 million

Government guarantee

70% of the facility

Loan term

Up to 6 years

Personal guarantee

May be required but cannot be taken over principal home

Eligibility

UK-based businesses with turnover up to GBP 45m

End date

Applications accepted until 31 March 2026

The Growth Guarantee Scheme helps businesses access finance by providing a government guarantee to the lender. Use it for:

Working capital

Asset purchase

Investment and growth

Apply through participating lenders - the scheme is administered by the British Business Bank.

Growth Guarantee Scheme (opens in a new tab)
Apply for innovation funding

Innovate UK offers grants and loans for innovative tech projects. Competitions run throughout the year.

Explore business funding options

Compare grants, loans, and government-backed finance for scaling tech businesses.
Raising equity investment

Equity investment from angels and VCs is the primary growth fuel for ambitious tech companies. SEIS and EIS make UK tech startups attractive to investors with generous tax reliefs.

SEIS - tax relief for early-stage investment

SEIS offers investors 50% income tax relief on investments up to GBP 200,000 per year in qualifying companies. Companies can raise up to GBP 250,000 under SEIS. Get advance assurance from HMRC before fundraising.

Maximum investment per company

£250,000 lifetime limit

Income tax relief for investors

50% of the amount invested

Capital Gains Tax relief

50% CGT exemption on gains reinvested through SEIS

Company age

Less than 3 years old at time of first SEIS investment

Gross assets limit

Must not exceed £350,000 at time of investment

Employee limit

Fewer than 25 full-time equivalent employees

SEIS offers the most generous tax reliefs of any UK venture capital scheme, designed specifically for very early-stage companies. It can be used before or alongside EIS, providing up to £250,000 in seed funding with exceptional investor incentives.

Apply to use SEIS (opens in a new tab)

Use SEIS for seed funding

50% tax relief makes SEIS-qualifying companies highly attractive to angel investors. Apply for advance assurance.

EIS - tax relief for growth investment

EIS offers investors 30% income tax relief on investments up to GBP 1 million per year. Companies can raise up to GBP 5 million per year (GBP 12 million lifetime). Knowledge-intensive companies get enhanced limits - up to GBP 10 million per year.

From 6 April 2026: Investment and asset limits double, making EIS accessible to larger growth companies.

Annual investment limit (standard)

£10 million (doubled from £5 million, April 2026)

Lifetime investment limit (standard)

£24 million (doubled from £12 million, April 2026)

Annual investment limit (knowledge-intensive)

£20 million (doubled from £10 million, April 2026)

Lifetime investment limit (knowledge-intensive)

£40 million (doubled from £20 million, April 2026)

Gross assets limit (before investment)

£30 million (doubled from £15 million, April 2026)

Gross assets limit (after investment)

£35 million (doubled from £16 million, April 2026)

Company age limit

Less than 7 years since first commercial sale (10 years for knowledge-intensive)

Employee limit

Fewer than 250 full-time equivalent (500 for knowledge-intensive)

Income tax relief for investors

30% of investment (annual limit £1m, or £2m if £1m+ in knowledge-intensive)

CGT exemption

Gains tax-free if shares held 3+ years and full income tax relief received

CGT deferral

Defer gains from any asset by reinvesting in EIS shares (1 year before to 3 years after disposal)

Loss relief

Losses (less income tax relief) can be offset against income, not just capital gains

Apply for EIS advance assurance (opens in a new tab)

Use EIS for growth rounds

30% investor tax relief for larger funding rounds. Knowledge-intensive tech companies get enhanced limits.

Raising equity investment

Understand how equity rounds work, from angels to Series A and beyond.
Building your tech team

Scaling requires talent. As you grow beyond early hires, you'll need structured recruitment, competitive equity packages, and potentially access to international talent pools.

EMI share options to attract tech talent

Enterprise Management Incentives (EMI) allow tech companies to grant tax-efficient share options. Employees pay only 10% Capital Gains Tax on gains (vs up to 45% income tax). Company must have under GBP 120 million in gross assets and fewer than 500 full-time equivalent employees.
Official guidance (opens in a new tab)

gov.uk
Set up EMI share options (opens in a new tab)

Tax-efficient equity to attract top tech talent. Consult a specialist for compliant scheme structure.

Sponsor licence for international talent

To hire developers without UK work rights, you need a sponsor licence (GBP 536 for small businesses, GBP 1,476 for medium/large). Processing takes 8 weeks standard. Skilled Worker visa minimum salary is GBP 38,700 for most tech roles.

Worker route (medium/large)

£1,579 application fee

Worker route (small/charity)

£574 application fee

Temporary Worker route (all sizes)

£574 application fee

Add Worker route to existing Temp licence

£1,005 (large) or free (small)

Priority processing

+£500 for decision within 10 working days

Premium sponsor service (large)

£25,000 for 12 months

Premium sponsor service (small)

£8,000 for 12 months

Sponsor licence fees are non-refundable if your application is refused. You cannot recover these fees from workers - doing so may result in licence revocation.

Apply for a sponsor licence (opens in a new tab)

Home Office immigration and nationality fees from 1 July 2025 (opens in a new tab)

Get a sponsor licence

Essential for accessing global tech talent. Apply 3+ months before you need to make international hires.

Scale-Up visa for fast-growing tech companies

The Scale-Up visa allows sponsored workers to switch employers or become self-employed after 6 months. Minimum salary GBP 36,300 or going rate (whichever higher). Requires sponsor to be endorsed as a scale-up by approved body showing 20% annual growth in turnover or headcount.
Official guidance (opens in a new tab)

Use Scale-Up visa route

For companies with 20%+ annual growth - more flexible than Skilled Worker for senior hires.
International expansion
Tech businesses scale globally more easily than most sectors, but international expansion brings tax complexity, export controls, and data transfer requirements.

Requirement · Export controls for technology

Certain technology, software, and cryptographic items require export licences. Dual-use technology with potential military applications, encryption software exceeding certain key lengths, and cyber-surveillance tools are controlled. Check the UK Strategic Export Control Lists before exporting.

Applies to: Tech companies exporting encryption, security tools, AI/ML systems, or dual-use technology
Official guidance (opens in a new tab)
Export licensing for controlled technology

The Export Control Joint Unit (ECJU) issues licences for controlled goods. Standard Individual Export Licences (SIEL) take 20-60 working days. Open General Export Licences (OGEL) cover pre-approved destinations with registration.
Controlled items

You need an export licence for:

Cryptography: Encryption software exceeding certain key lengths (56-bit symmetric, 512-bit asymmetric thresholds, with exceptions for mass-market products)

Intrusion software: Tools designed to avoid detection by monitoring tools or defeat protective countermeasures

Surveillance technology: Interception, monitoring, or forensic analysis tools

Dual-use technology: Software/tech with potential military applications (network analysis, cybersecurity tools beyond certain thresholds)

Technology transfer: Technical data, blueprints, know-how for developing controlled items

What counts as export?

Export includes:

Physical export from the UK

Electronic transmission to persons outside the UK (including cloud storage)

Making technology available to non-UK nationals in the UK

Providing services enabling use of controlled items abroad

Mass-market cryptography exemption

Generally available encryption products sold through retail channels without restriction may be exempt, but you must submit a classification request for confirmation.

Open source exemption

Cryptographic software in the public domain (open source) may be exempt, but notification to Export Control Joint Unit may be required.

Embargoed destinations

Additional restrictions apply for exports to sanctioned countries (Russia, Belarus, Iran, North Korea, Syria, etc.). Check current sanctions before any export.

Step 1

Review your software and technology against the dual-use list in Annex I of the Export Control Order

Step 2

For cryptography, determine key lengths and whether products qualify as mass-market

Step 3

Submit classification requests to Export Control Joint Unit if uncertain

Step 4

For controlled items, apply for export licence before shipping or transmitting

Step 5

Check destination country against current UK sanctions lists

Step 6

Implement internal compliance procedures to screen customers and destinations

Step 7

Train staff on export control obligations, especially sales and technical teams

Step 8

Maintain records of export licence applications and decisions

Step 9

For cloud services, consider data residency implications

Step 10

If open source, determine if notification to ECJU is required

Export controls for technology (opens in a new tab)
Understand export controls

Check if your technology requires export licensing before selling internationally.

Dual-use technology exports

Encryption, security software, and AI may require licences. Check before exporting.

Requirement · International data transfers under UK GDPR

Transferring personal data outside the UK requires legal mechanisms. Data can flow freely to countries with UK adequacy decisions (including EU, Japan, South Korea). For other countries, use Standard Contractual Clauses (SCCs), Binding Corporate Rules, or other safeguards.

Applies to: Tech companies with international users, cloud infrastructure abroad, or overseas subsidiaries
Official guidance (opens in a new tab)

International data transfers

Ensure lawful data transfers to international servers, subsidiaries, and third parties.

VAT on international services

Digital services have special VAT rules based on customer location. Get treatment right.

Export market research

Use DBT resources to identify and research international markets for your tech products.
Intellectual property at scale

As your tech company grows, IP becomes a strategic asset. Patents protect innovations, trademarks protect your brand, and licensing creates revenue streams.

Protect your intellectual property

Strategic IP protection: patents for inventions, trademarks for brand, designs for visual elements.

Software IP protection

Copyright, patents, and trade secrets for protecting software and algorithms.

Patent Box - 10% Corporation Tax on patent profits

The Patent Box regime allows companies to pay only 10% Corporation Tax on profits from patented inventions (vs standard 25%). Must own or exclusively license qualifying patents. Applies to UK, EU, and certain international patents. Phase-in period applies to pre-2016 patents.
Official guidance (opens in a new tab)

gov.uk
Patent Box regime (opens in a new tab)

10% Corporation Tax rate on qualifying patent profits. Valuable for patent-rich tech companies.

Register a trademark

Protect your brand name and logo as you expand. Essential before international expansion.
Compliance at scale
Growth triggers new compliance obligations. Larger companies face audit requirements, enhanced data protection duties, and potentially Digital Services Tax.
Digital Services Tax for large tech platforms

DST is a 2% tax on UK revenues from social media platforms, search engines, and online marketplaces. Only applies if group has over GBP 500 million global revenues and GBP 25 million UK revenues from in-scope activities.
Digital Services Tax (DST) is a 2% tax on revenues from search engines, social media services, and online marketplaces that derive value from UK users. It applies to groups with worldwide digital services revenues exceeding £500 million and UK revenues exceeding £25 million annually.

DST rate

2% of UK digital services revenues

Global revenue threshold

£500 million per year (worldwide digital services revenues)

UK revenue threshold

£25 million per year (UK digital services revenues)

DST allowance

£25 million (deductible from UK revenues before calculating DST)

Tax year

2026/27 (rates unchanged since introduction 1 April 2020)

In-scope digital services
Social media platforms: Services that promote user interaction and user-generated content
Search engines: Internet search engines only (not on-site search)
Online marketplaces: Platforms that facilitate third-party sales
Associated online advertising: Advertising connected to qualifying services
DST is generally deductible as a business expense for corporation tax purposes.

Registration deadline

90 days from end of first accounting period in scope

Payment deadline

9 months and 1 day from end of accounting period

Return submission deadline

12 months from end of accounting period

Penalties for late returns
Within 3 months late: £100 penalty
Over 3 months late: £200 penalty
Third successive late return: £500 (if within 3 months) or £1,000 (if over 3 months)

Check if you need to register for Digital Services Tax (opens in a new tab)
Digital Services Tax

2% tax on large tech platforms. Check if your business is in scope as revenues grow.

Data protection at scale

Growing data volumes increase GDPR obligations. Review policies and security as you scale.

Data breach response

Have a breach response plan. ICO notification required within 72 hours for serious breaches.

Requirement · Audit requirements as you grow

Companies must have statutory audits if they exceed 2 of 3 thresholds: GBP 15 million turnover, GBP 7.5 million balance sheet, 50 employees. Group companies have lower thresholds. Plan ahead - first audits require significant preparation.

Applies to: Tech companies approaching or exceeding small company thresholds
Official guidance (opens in a new tab)
Company size thresholds and reporting

From April 2025, size thresholds have increased. Small companies meeting at least two qualifying conditions, including turnover no more than GBP 15 million and balance sheet total no more than GBP 7.5 million, may be exempt from audit. Medium companies have additional reporting requirements. Know which thresholds affect your business.
From 6 April 2025 (for financial years beginning on or after this date), the thresholds that determine whether your company is 'micro', 'small', or 'medium' are changing. These classifications affect audit exemption, abbreviated accounts eligibility, and IR35 off-payroll working rules.

Micro-entity (April 2025)

Turnover ≤£1m, Balance sheet ≤£500k, Employees ≤10

Small company (April 2025)

Turnover ≤£15m, Balance sheet ≤£7.5m, Employees ≤50

Medium company (April 2025)

Turnover ≤£54m, Balance sheet ≤£27m, Employees ≤250

Large company

Exceeds medium company thresholds

OLD thresholds (until April 2025):
Micro - Turnover ≤£632k, Balance sheet ≤£316k, Employees ≤10
Small - Turnover ≤£10.2m, Balance sheet ≤£5.1m, Employees ≤50
Medium - Turnover ≤£36m, Balance sheet ≤£18m, Employees ≤250
NEW thresholds (from April 2025):
Micro - Turnover ≤£1m (+58% increase), Balance sheet ≤£500k (+58%), Employees ≤10 (same)
Small - Turnover ≤£15m (+47% increase), Balance sheet ≤£7.5m (+47%), Employees ≤50 (same)
Medium - Turnover ≤£54m (+50% increase), Balance sheet ≤£27m (+50%), Employees ≤250 (same)

To determine your company size, you must meet 2 out of 3 thresholds for 2 consecutive years.
For example, a company with £12m turnover, £4m balance sheet, and 45 employees meets all three small company thresholds, so qualifies as 'small' (from second year onwards).

What size classification affects:
1. Audit exemption:
Micro and small companies: EXEMPT from statutory audit (unless excluded, for example financial services, charity)
Medium and large companies: MUST have statutory audit
Many more companies will qualify for audit exemption from April 2025 due to higher thresholds
2. Abbreviated accounts:
Micro-entities: Can file simplified micro-entity accounts with Companies House
Small companies: Can file abridged balance sheet (no profit & loss statement required publicly)
Important - paused filing reform: the proposed requirement for small companies and micro-entities to file profit and loss accounts was paused in January 2026 and has no confirmed commencement date
Medium companies: Must file full accounts
3. IR35 off-payroll working rules:
Small companies (under new thresholds): EXEMPT from IR35 off-payroll rules for contractors/PSCs
Medium and large companies: MUST apply IR35 determinations and operate off-payroll working rules
Delayed effect: IR35 status depends on meeting the CA2006 size test for 2 consecutive financial years, so a company only gains exemption once its size classification changes under the new thresholds - in practice this means the earliest affected tax year is 2027/28, not April 2025

IR35 impact example:
Company with £14m turnover, £6m balance sheet, 40 employees
Under old rules - exceeded the £10.2m turnover threshold, so caught by IR35 off-payroll rules
Under new rules - below the £15m turnover threshold, so would qualify as 'small' and exempt from IR35
Because IR35 status depends on meeting the size test for 2 consecutive financial years, this company will not actually become exempt until it has met the new 'small' thresholds for 2 consecutive years - the earliest practical impact is the 2027/28 tax year, not April 2025

Directors' report requirements:
Micro-entities: NOT required to file directors' report
Small companies: Must prepare directors' report but NOT file it publicly (can file abridged version)
Paused reform: the proposed public filing requirement for small-company directors' reports was paused in January 2026 and has no confirmed commencement date
Medium and large companies: Must file full directors' report publicly

Transition from old to new thresholds:
New thresholds apply to financial years beginning on or after 6 April 2025
Example: Company with December year-end (ending 31 Dec 2025) uses OLD thresholds (financial year began Dec 2024)
Example: Company with June year-end (ending 30 June 2026) uses NEW thresholds (financial year began July 2025)

Legal basis: Companies Act 2006 (as amended by The Companies (Accounts and Reports) (Amendment and Transitional Provision) Regulations 2024 (SI 2024/1303)). IR35 exemption: Chapter 10, Part 2, ITEPA 2003.
Official source: gov.uk/annual-accounts
Preparing for exit

Whether planning trade sale, private equity exit, or IPO, preparation starts years before the event. Clean cap tables, solid financials, and defensible IP are essential.

Business Asset Disposal Relief (BADR) for founders

BADR (formerly Entrepreneurs' Relief) provides a reduced Capital Gains Tax rate of 18% on qualifying business disposals up to GBP 1 million lifetime limit. Must hold 5%+ of shares and voting rights and be an employee or officer for 2 years before disposal. Plan shareholdings to qualify.
Official guidance (opens in a new tab)

gov.uk
Business Asset Disposal Relief (opens in a new tab)

18% CGT on qualifying share disposals. Ensure your shareholding qualifies before exit.

Investors' Relief for EIS/SEIS shareholders

EIS investors pay 0% CGT on qualifying share disposals (after 3+ years), making your company more attractive to investors. SEIS investors also get CGT exemption on gains. Ensure shares were held for minimum period before exit.
Official guidance (opens in a new tab)

File Company Tax Return (CT600)

Ensure tax returns are current and accurate before due diligence. Address any outstanding queries.

Requirement · Pre-exit IP due diligence

Acquirers will scrutinise IP ownership. Ensure all employee and contractor IP assignments are documented. Verify open source licence compliance. Register key trademarks and patents. Clean IP is essential for valuation and deal completion.

Applies to: Tech companies preparing for trade sale, PE investment, or IPO
Official guidance (opens in a new tab)

Identify your intellectual property

Audit and document all IP before exit. Gaps in IP ownership can derail deals.

Corporation Tax loss relief

Understand how losses carry forward and whether they'll transfer on sale or acquisition.

Grow your tech business

Assessing scale-up readiness

Funding your growth

Raising equity investment

Building your tech team

International expansion

Intellectual property at scale

Compliance at scale

Preparing for exit

Related journeys

Run a tech business

Start a fintech business

Export controlled goods and dual-use items

Start a tech business