One of the UK’s leading entrepreneurs is calling on the government to introduce tax cuts for professors that want to back startups founded at universities across the UK.
Nick Hungerford, CEO of London-based fintech firm Nutmeg, an online money management platform that has been tipped to be the next UK company to achieve a billion dollar valuation, revealed he is in talks with government on the issue.
“We are driving very hard for the UK Treasury to provide substantial incentives for professors and faculty here in the UK to be able to invest in companies in a tax advantageous way,” said the Stanford MBA graduate at the launch of a new Stanford entrepreneurship course in London. "
"My belief is that linking first class education to entrepreneurship will dramatically improve the venture ecosystem," continued Hungerford. "Professors and other academic staff are key cogs in this wheel as they give young entrepreneurs brand credibility and subject matter expertise. We need to find ways to incentivise them to take solid interest in young businesses."
When individuals buy shares in a company they usually pay a tax of 0.5 percent on the transaction. If the transaction is over £1,000, then a stamp duty must also be paid.
Hungerford claimed the tax regime in the US is more favourable, adding: “I have multiple examples of friends companies being funded by Stanford professors. That happens naturally because professors want to get involved.”
Many of the UK's most promising startups are spawned at its world-leading academic institutions but there concerns that these ideas don't always come to fruition because they don't get the funding they need.
“I think there is no better supporter than the brains of a professor who has seen it from the ground up," said Hungerford.
HM Treasury is yet to respond to Techworld’s request for more information.