The limit to annual investment under the Enterprise Investment Scheme (EIS) and other tax-based venture capital schemes could be raised above £2m according to the UK government.
At the EIS Association’s spring seminar, David Halliday of the HM Revenue & Customs (HMRC) announced that the government was negotiating with Brussels to up the state aid barrier, and believed that so long as there was “solid evidence” to justify such a move, such a case could be argued. The HMRC is working on a consultation document into the EIS.
The EIS is a government scheme that encourages investment in smaller, higher-risk companies, by offering investors with a range of tax reliefs. In a March consultation document produced by the HMRC and the Treasury, plans were revealed to increase the annual investor limit to £500,000. To date, the scheme has helped raise over £6.1bn of venture capital funding for over 14,000 companies. The consultation period closes on June 20th.
Emma Ward of the Department for Business Enterprise & Regulatory Reform (BERR), revealed at the same seminar that the department is due to launch a survey into the UK equity gap, which the EIS Association hopes will support the HMRC’s case in Brussels.
Chairman of the Association and former deputy chairman of the Conservative Party, Howard Flight, said: “This seminar provided our members with the opportunity to quiz the HMRC team on their consultation document. I urge all our members and others involved with EIS schemes to respond to the consultation document and if we can back up our proposals with solid evidence, as highlighted by Mr Halliday, then we have a good chance of influencing the final result.”