Growth firms urge Chancellor to save ‘vital’ EIS
Chancellor Kwasi Kwarteng is being urged to maintain support for a key scheme that has helped fund thousands of high-growth businesses.
Investors have benefited from income and capital gains tax reliefs provided by the Enterprise Investment Scheme since it was set up in 1994.
But the relief will end in April 2025 unless the government acts and there are calls for Mr Kwarteng to confirm continuation of the scheme when he announces his fiscal event on Friday.
Sister programme, the Seed Enterprise Investment Scheme, which targets smaller companies, is unaffected.
The SEIS and EIS tax breaks are regarded as key incentives for early stage investors, including high net worth individuals who form the backbone of the angel network.
One leader of an angels group, Roderick Beer, said the loss of the relief could prove disastrous for Britain’s start-up ecosystem. “It could be the death-knell to this seed-stage [investing] industry. We are massively ahead of other countries in mainland Europe and it’s driven almost entirely by EIS being around for 28 years,” he told The Times.
Michael Moore, director-general of the British Private Equity & Venture Capital Association, also expressed concern. He said “incentives like SEIS, EIS and VCTs [venture capital trusts] encourage investment that is so vital to their success.
“At a time of economic uncertainty, we’d welcome confirmation from the chancellor on renewal of these schemes.”