Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment. Take 2 mins to learn more.

News & Insights

March 2020 – Challenging Times but much To Be Thankful For

Christopher Hall, Managing Partner

At times when the headlines are alarming, it is helpful to think of the things for which we can be thankful. We at Oxford Investment Consultants (OIC) would like to acknowledge a few of those here, beginning with certain aspects of Chancellor Rishi Sunak’s first Budget on March 11th, and continuing with a recognition of what our portfolio companies are doing to combat the current adverse conditions arising from COVID-19.

The Budget includes several helpful measures for what many of our portfolio companies, and we at OIC, strive to achieve: increased support to scale the UK’s emerging technology companies in both the public and private sectors. Further significant governmental support, through availability of additional financing and changes to tax laws, will be essential in order to combat the significant gap between the promise of UK technology as a whole and the funding available to nurture and develop it to its full potential, particularly in the event of a prolonged downturn in the capital markets.

Investing in innovation

Acknowledging that the UK’s future success will be rooted in the advancement of cutting-edge technology and innovation, the Budget sets out plans to increase public R&D investment to £22 billion per year by 2024-25 with an objective of increasing economy-wide investment in R&D to 2.4% of GDP by 2027. This is the largest and fastest expansion in support of researchers and innovation in UK history and would place the UK in the top quarter of OECD nations. It will benefit a range of activities including:

  • supporting world-leading research in all regions of the UK, including by cutting bureaucracy, experimenting with new funding models, and establishing a new funding agency to focus on high-risk, high-reward research
  • meeting the great challenges facing society, including climate change and providing funding to pursue ‘moonshot’ scientific missions
  • investing in the Government’s own strategic science capability and improving public services
  • backing businesses to invest and innovate so that they can compete in the global technology-driven economy.

The failure to scale UK biotech companies remains a significant issue that the Government is determined to change. Recognising that private sector support is essential, the Government has set aside a series of funding options through the British Business Bank, the UK’s economic development bank, to encourage the support of SMEs and R&D by the private sector. In life sciences, the government will provide the British Business Bank with additional resources to launch a dedicated £200 million investment programme which is expected to enable £600 million of investment, helping to ensure the UK remains a world leader in life sciences innovation. Set to launch within a year, this programme will build on the £350 million of finance to life sciences firms currently supported by the British Business Bank by supporting large-scale venture growth funds. The Budget will support and encourage this by increasing the rate of R&D Expenditure Credit from 12% to 13%. The Government will also consult on whether qualifying R&D tax credit costs should include investments in data and cloud computing, which would directly benefit several of our portfolio companies.

In recognition of the role of scientific clusters in establishing knowledge intensive businesses, the Government will provide £180 million over six years for a new state-of-the-art storage and research facility for the Natural History Museum at Harwell Science and Innovation Campus, where two of our portfolio companies, Oxford Space Systems and Keit Spectrometers, are based. This upgrade is intended to put the facility at the forefront of natural sciences research and international collaboration, housing and increasing access to around 40% of this world-leading biological collection. The Government will also invest over £900 million to ensure UK businesses are leading the way in high-potential technologies, including the commercialisation of nuclear fusion technology, offering potentially limitless clean energy, and supporting the Government’s ambitious National Space Strategy and space innovation fund.

EIS rules

For the individual investor, tax efficient investments remain unchanged from 2019/20 to 2020/21 with the SEIS investment allowance remaining at £100,000 per annum, the general EIS allowance at £1 million per annum, and the Knowledge Intensive EIS allowance remaining at £2 million per annum. Similarly, the amount of capital that companies may raise under the EIS allowance remains as before. In our view, these are areas where more can be done to bridge the funding gap that still affects otherwise healthy companies with world beating potential; perhaps the salient examples where more remains to be done are the existing limitations on gross assets before and after fundraising, and the annual and lifetime limits on qualifying funding.

Backing SMEs

The Government will help small businesses take on extra staff to fulfil their potential and boost employment by increasing the Employment Allowance to £4,000, benefiting around 510,000 businesses, including around 65,000 businesses which will be taken out of paying NICs entirely. The Government is keeping the UK’s Corporation Tax rate at 19% – the lowest in the G7 and G20 – encouraging businesses to start in the UK. The Budget will help businesses to take advantage of opportunities for the UK outside the EU, for example through new financial support for British exporters and by investing in additional business support for SMEs through Growth Hubs.

Combating COVID-19

While there is nothing to celebrate in the outbreak of a global health crisis, we acknowledge both the support of the Government so far and the entrepreneurship of our portfolio companies in combating COVID-19.

The Budget’s main virus-related assistance for SMEs provides that for businesses with fewer than 250 employees the cost of providing statutory sick pay would be refunded in full for up to 14 days per employee — a measure expected to cost £2 billion.

The Chancellor also announced a new Coronavirus Business Interruption Loan Scheme to support SMEs. This includes expanded Business Rates reliefs, a Coronavirus Business Interruption Loan Scheme to support up to a further £1 billion lending to SMEs, a £2.2 billion grant scheme for small businesses, and a dedicated helpline for those who need a deferral period on their tax liabilities. The Chancellor has also asked HM Revenue & Customs to “scale up” it’s Time to Pay service to allow individuals and small businesses extra time to pay tax bills. A Time to Pay Arrangement allows for tax to be paid back in monthly instalments, typically over a period of up to 12 months, with some such some arrangements having longer periods.

The rapidity with which many of our portfolio companies have developed contingency plans, including plans for working remotely and for preservation of capital, has been striking and unfortunately necessary. Some companies have seen how their products and services may help stem the spread of the disease – Navenio Ltd, whose platform uses AI to enable more efficient delivery of services to healthcare facilities, including infection control and deep cleaning, is one example of a company that can have a major positive impact; Oxehealth Ltd, which provides remote monitoring of patients’ vital signs in residential healthcare facilities, is another company well equipped in the fight against the spread of this and other outbreaks. We salute the efforts of our entrepreneurs to combat the adverse effects of the virus and to continue to develop their world-changing technologies in the present circumstances.  We note with some sadness that these circumstances appear challenging on a level that is almost unprecedented, and accordingly we anticipate that funding discussions in the foreseeable future will trigger a more detailed examination than ever of revised budgets, business and marketing plans, and strategies for survival and prospering, for which we must all be prepared.

Stay well,



For more information see below:

Government support for business affected by COVID-19:

Claiming research and development tax reliefs:

Venture Capital Tax Relief Schemes:

British Business Bank webpage: