How Yorkshire Gains Tax Revenue Through its Biggest Tech Companies

As the largest region in the UK, it comes as no surprise that Yorkshire possesses a diverse economic system with multiple sectors contributing to an economy worth an impressive £110 billion a year. To put that into context, it is bigger than the economies of Wales and several small EU nations. And while the county affectionally known by its inhabitants as ‘God’s own country’ is steeped in a rich industrial history, more recently, the region has emerged as a hub for some of the UK’s most exciting and innovative tech companies. So much so that many firms in the UK’s capital are now relocating from London to Leeds to be part of this burgeoning tech scene.

This is good news for Yorkshire, with the significant tax revenues generated by such high-performing businesses helping to boost the region’s infrastructure and provide a much-needed financial injection into areas that have experienced years of economic turbulence. Here’s how Yorkshire is benefiting from its ever-growing technology sector.

Yorkshire’s shifting economy

Whether it’s the textile mills of the West Riding, the steel factories of Sheffield, or the scores of coal mines throughout the county, for much of the 20th century Yorkshire was firmly established as an industrial powerhouse – with industry bringing wealth, urbanization and a cultural identity to the region. Unfortunately, the de-industrialisation of the UK in the 1980s led to a significant decline in Yorkshire, a loss of jobs for working people, and with it, decades of economic difficulty.

In recent years, however, the county has experienced a staggering economic transition, shifting away from traditional heavy industries into more modern sectors like technology, finance, healthcare, and research, bringing in a new era of economic growth. Major cities like Leeds, Sheffield, and Hull are now keeping pace with other cities across the country, developing a perfect environment for the latest tech companies.

The largest tech players in the region

Let’s take a look at some of the biggest tech companies that have emerged in Yorkshire.

CloudCoCo

With headquarters in Leeds, CloudCoCo has established itself as the number one IT support provider in the UK offering a range of IT services and cybersecurity to clients across the country. In 2022, the company experienced a 198% increase in revenue, growing from £8.1 million to over £24 million, while a healthy end-of-year turnover of £7 million was reported at the end of 2023. Recently selling the services arm of their business for £9 million, CloudCoCo continues to impress.

365 Response

Based out of Wakefield, 365 Response offers its unique software technology to its clients, providing logistics and enhanced digital transport solutions. Operating mainly in the health and social care sector, working directly with the NHS, the company aims to streamline administration systems in place in the healthcare system, helping to address inefficiencies surrounding the transport of patient data. A multi-award winning company, 2024 saw the company achieve $7.3 million in annual revenue.

SkyBet

Leeds-based SkyBet has firmly become a leading online betting platform across the UK, generating significant revenues through its website and mobile app. One of the fastest-growing industries in the UK, iGaming continues to prove its worth, contributing to the economy while providing players with high-quality gaming destinations. Casino.org scours the net for bonuses, making sure players can find these high-quality platforms when they play, acting as a mediator between customers and companies like SkyBet, showing that the growth of the online gambling market has even made room for third parties within the vertical. SkyBet was bought by The Stars Group for $4.7 billion in 2018, showing that iGaming companies continue to be a major player in the digital tech industry.

Cirata

This innovative software company specialises in data replication and migration for cloud platforms like AWS, Microsoft Azure, and Google Cloud. Serving industries like finance, healthcare, and telecommunications, this Sheffield-based company supports businesses in digital transformation, helping to provide secure and efficient data solutions. Cirata also possesses a US arm based in the tech capital of California, highlighting the potential of this company.

How does Yorkshire benefit from having these companies?

Corporation tax

All companies headquartered in Yorkshire must pay a corporate tax on any profits they make, which is currently set at 25% in the UK. A growing technology hub indicates that companies are experiencing success and, therefore, generating profit. The tax revenue generated is transferred to the government to be spent on areas like transport, infrastructure, and regional projects.

Tax on goods and services

Any services or products sold by tech firms in Yorkshire generate tax revenue through VAT. Currently, a 20% VAT tax is applied to most goods and services, further adding to the national tax pot to be spent within the country.

Income tax

A direct impact of an emerging tech industry is extensive job creation in the region – with new companies all requiring a range of different employees across multiple skill levels. Employees pay income tax, the amount of which depends on the level of income, and national insurance, which contributes substantial amounts to the tax pool.

Facilitating regional growth

A successful tech sector has the ability to attract other businesses to the region as well as foreign and domestic investment. In what is often a snowball effect, influencing the continued growth of the area helps to create a positive cycle of economic success. With every new business that moves to the region, another avenue of tax revenue is attained.

Moving Forward

As Yorkshire’s emerging tech hub continues to add exciting firms to its already impressive list of tech companies, it is apparent that significant tax revenues are being generated and subsequently reinvested into areas of the region that require it most. Looking ahead, however, companies and councils will be aware of potential bumps in the road – British companies are still feeling the effects of Brexit while Labour’s corporate tax plans are still to be fully realised. Furthermore, with global competition going from strength to strength, companies in Yorkshire will require continued investment to keep up.

The region is enjoying this second wind of economic success, and many of those at the heart of Yorkshire’s tech revolution will be hoping this success continues far into the future.