The Treasury have published a consultation document proposing a reform of EIS and VCT relief to further support seed investment in small, high risk enterprises. The proposals concentrate on three main issues, additional support for seed investment, simplification of the current venture capital schemes, and refocusing the schemes to ensure that they support early-stage investment.
The consultation suggests that a more focused scheme might give tax relief for some types of debt instrument rather than restricting tax relief to investment in ordinary share capital. However, there is likely to be a narrower category of investor and a narrower category of company than under the current venture capital schemes.
Venture Capital schemes, which include EIS, are often overlooked as a highly tax efficient way of raising capital for trading companies. We can help ensure that your clients make full use of this relief.