Reimagining Government Support for Startups: A Call for Breathing Room, Tax Reform, and Streamlined Processes How can government policies better support startup growth?

In an interview, with Entrepreneur UK, Zain Ali, co-founder and CEO of London based Centuro Global, a global business services provider that helps companies expand internationally, outlined some of the most pressing challenges facing startups today, especially in the UK. His insights shed light on how government policies - designed to foster growth - are instead stifling innovation and creating barriers for entrepreneurs who are eager to scale. Drawing on his experience, Ali offers a thoughtful critique and a compelling vision for a future where the government creates a supportive environment for startups.

Breathing Room, Not Hand-Holding
When asked how the government could make it easier for startups to grow, Ali made an important distinction: "Startups don't need hand-holding, they need breathing room." This distinction is key. While it's tempting to think of startups as fragile ventures that require constant guidance, Ali suggests that what they truly need is space to maneuver - space to innovate, hire talent, and scale without being weighed down by regulatory burdens.

One of the most pressing concerns is the bureaucratic red tape around hiring international talent. Startups are in an intense race for the best and brightest minds from around the world, but navigating the legal and regulatory maze in order to hire global talent is, as Ali points out, a huge challenge. "The government could make growth easier by reducing red tape around hiring international talent, making regulatory guidance easier to navigate, and easing access to banking, visas, and compliance tools."

Ali also calls out the inherent flaws in the UK's tax system, which he argues is a significant barrier for early-stage businesses. "The UK tax system is stacked against early-stage growth. It hits founders hard, limits how much they can earn, and reinvest, and indirectly pushes up salary expectations for new hires, especially in places like London where the cost of living is sky-high." For startups already dealing with tight margins and cash flow challenges, this tax burden compounds the struggle to attract top-tier talent, especially in cities with high living costs. According to Ali, this regulatory and financial burden creates a situation where it becomes increasingly unaffordable for startups to grow at the pace needed to compete globally. He sums it up starkly: "If we want more homegrown success stories, we need to stop penalising the people trying to build them."

The Slow Grind of R&D Tax Credits
The UK's Research & Development (R&D) tax credits are meant to reward innovation and support businesses working to develop new technologies and intellectual property. Centuro Global has made use of these tax credits, particularly to fund AI development and build intellectual property in the UK. However, Ali describes the process as anything but seamless. He states: "The R&D tax credit is a vital lever and in theory, a brilliant way to reward innovation. We've used it to help us reinvest in AI development, and build intellectual property in the UK. It's helped us stay competitive. But the process? Painfully slow."

For early-stage startups, time is critical. Delays in the R&D claims process pose a significant risk to cash flow, as these startups rely heavily on timely financial support to sustain their operations. Ali urges the government to streamline the process and make it more efficient. "Improving the efficiency and responsiveness of R&D claims could make a huge difference. Especially when cash burn is high and every month counts."

The Need for a Holistic Approach to Startup Growth
Ali doesn't just focus on the issues that hinder startups in their infancy, he also points out a crucial gap in the ecosystem when businesses are ready to scale. "Too many promising businesses get to £5M ARR and stall. We need a playbook to help them scale globally from here, not move abroad to do it." While startups in the UK receive significant attention and support in their early stages, there's a clear lack of structured support for scaling businesses. Ali believes that the government needs to rethink its approach, not only nurturing nascent startups but also helping those that have already found success on a small scale to expand their operations globally.

To make the UK more competitive as a destination for innovation, Ali argues that the government's focus should extend beyond traditional tech funding and infrastructure projects. He emphasizes the importance of policy reforms that can keep pace with the needs of startups, stating: "Innovation isn't just about funding deep tech or building new science parks. It's about mindset."

Listening to Founders: The Key to Innovation
Above all, Ali believes that innovation thrives on clarity and confidence, not on uncertainty and confusion. He highlights the need for a government that listens to the founders who are directly involved in creating the next wave of innovative solutions. "To make the UK a true home for innovation, the government needs to build policy that moves at the speed of startups, streamline immigration for global talent, and create consistency in funding and regulation. Most of all, it needs to listen."

Startups, as Ali points out, are on the front lines of the innovation economy. They know where the friction is, and it's time for the government to tap into that firsthand knowledge and act on it.

In a world where the global startup race is more competitive than ever, the UK has an opportunity to lead by creating a supportive and predictable environment for entrepreneurs. Ali's message is clear: let's stop penalizing those who are trying to build the next generation of successful, homegrown businesses. By offering breathing room, simplifying processes, and listening to the needs of founders, the government can help fuel the growth of the next wave of global startups—ones that will drive innovation and economic growth for years to come.