In today’s (23 September) Mini Budget, the chancellor revealed plans to renew both the Enterprise and Seed Enterprise Investment Schemes (EIS and SEIS) and VCT schemes beyond their 2025 deadlines, in a bid to boost UK entrepreneurship.
This means that the upcoming EU sunset clause is no longer an issue for these assets.
In his parliamentary address, Kwasi Kwarteng said this was one of the “crucial steps on the road to making this a nation of entrepreneurs”.
In the newly launched Growth Plan 2022, it detailed: “The government remains supportive of the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT) and sees the value of extending them in the future”.
Alongside this, the chancellor said the limits on the Seed Enterprise Investment Scheme and Company Share Option Plans would be increased to “make them more generous”. The former’s will be increased to £250,000 and the maximum age of the business raising capital increased to three years.
This move has been warmly received by the small-cap investment community, with Richard Stone, chief executive of the Association of Investment Companies, calling it a “strong vote of confidence in VCTs”, adding they “applaud the government’s intention to continue the scheme beyond 2025”.
He said that VCTs provide “scale-up finance for growing businesses” making them “fully aligned with the government’s drive for growth, creating jobs, funding innovation and boosting exports”, which were all key features of Kwarteng’s proposed plans.
“We look forward to clarification of how the government will remove the existing uncertainty surrounding the scheme,” Stone said.
Stephen Page, the founder and CEO of SFC Capital, said that the chancellor’s first major announcement “will have had entrepreneurs’, angels’, and VCs’ ears pricking up with great interest.
“The devil, of course, will be in the detail and the execution.”
He said the rhetoric around UK as an entrepreneurial hub was something businesses had hear dbefore.
“But proposed measures such as reform to SEIS, an extension to EIS, making £500, in new funds available for investment in high-tech innovation and fast-growth tech businesses, and unlocking pension funds to invest more in higher-risk asset classes such as venture capital are all very encouraging,” Page added.
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