If you are setting up a new software development company, London would be a good choice for its location. London was described as the city that offers businesses the most opportunities in the Cities of Opportunity report from PricewaterhouseCoopers (PwC), an accounting and consulting company. In particular, London was ranked first for technology readiness.
The popularity of London increased between 2009 and 2012 with the number of digital companies in the city growing substantially by 76% to 88,215, according to Tech City UK, an organisation that delivers programmes to accelerate the growth of technology businesses.
Here is a round-up of five of the advantages for software development companies in London.
Hubs and Incubators
Hubs and incubators provide environments that support the growth of start-up and small businesses. They offer such services as secure WiFi, test environments, mentoring programmes and networking events. In recent years, several hubs and incubators for technology companies have sprung up all over London.
If you are in the initial stages of setting up a software development company, you can rent a desk at a hub or incubator for less than £300 (excluding VAT) per month. Once your business begins to grow, you can rent office space by the square foot.
Several tax benefits are available to software development companies in London. When compared with other countries, the UK’s rate of corporation tax is low. The current rate of 21% on profits over £300,000 is due to be reduced to 20% from April 2015. In addition, companies employing fewer than 500 people can receive a research and development (R&D) tax credit at a rate of 225%.
If your company develops and sells patented products, it can also benefit from a reduced rate of corporation tax (10%) on its profits from patented products under the Patent Box scheme.
The UK government is committed to supporting the development of the technology sector in London. Two government organisations – Tech City UK and Innovate UK – are helping technological businesses to start up and grow in London.
Tech City UK offers several different programmes that aim to accelerate the growth of technological business. An example is its Future Fifty programme that helps digital companies to grow quickly through a wide range of mentoring, networking and promotional activities.
Innovate UK opened a Digital Catapult Centre in Kings Cross, London in November 2014. Its aim is to generate further growth in the digital technology sector by helping companies to develop and bring to market innovative new products and services in the shortest time frame possible.
As your software development company grows, you will need to recruit people with specialist skills. London is home to 155,600 digital technology professionals from many countries worldwide, according to London & Partners, the official promotional company for London. In addition, there are almost 20,000 computer science students at London universities.
High-speed Internet access is essential for software development companies in London. Some £830 million is being invested by the UK government in the development and implementation of super-fast broadband by 2015.
London is a popular place to set up a software development company. You will be close to other like-minded businesses and benefit from a variety of government-sponsored programmes. Tax incentives, a large and highly skilled workforce and super-fast broadband are three other advantages for software development companies in London.